In brief
- US President Donald Trump has rejected Iran's peace proposal response.
- It comes as a fresh wave of drone attacks swept across the Gulf.
US President Donald Trump branded Iran's terms for ending the Middle East war "totally unacceptable" on Monday, raising the likelihood of renewed conflict after weeks of negotiations.
Iran had responded to the US' latest peace proposal earlier in the day, while warning it would not hold back from retaliating against any new US strikes or permit more foreign warships in the Strait of Hormuz.
Trump himself provided no details on Iran's counterproposal, but in a brief post on his Truth Social platform made clear he was rejecting it.
"I have just read the response from Iran's so-called 'Representatives.' I don't like it — TOTALLY UNACCEPTABLE!" Trump said.
The back and forth came as Israeli Prime Minister Benjamin Netanyahu — whose forces launched the war on Iran along with the US military on 28 February — insisted the conflict was not over until Iran's enriched uranium was removed and its nuclear facilities dismantled.
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But Iran publicly maintained its defiant line, despite the behind-the-scenes diplomacy.
"We will never bow down to the enemy, and if there is talk of dialogue or negotiation, it does not mean surrender or retreat," Iranian President Masoud Pezeshkian said via X on Monday.
According to state broadcaster IRIB, Iran's response to the US plan, passed to Pakistani mediators, focuses on ending the war "on all fronts, especially Lebanon" — where Israel has kept up its fight with Iran-backed Hezbollah — as well as on "ensuring shipping security".
It offered little in the way of detail, though the US proposal had reportedly focused on extending the truce in the Gulf to allow for talks on a final settlement of the conflict and on Iran's contested nuclear program.
The impasse unnerved global energy markets, with oil prices opening sharply higher Monday. The international benchmark Brent crude jumped 2.69 per cent to US$104.01 ($144) a barrel on July delivery.
Netanyahu said on Monday that Iran's stockpile of enriched uranium must be removed before the US-Israeli war against Iran could be considered finished.
"It's not over, because there's still nuclear material — enriched uranium — that has to be taken out of Iran. There's still enrichment sites that have to be dismantled," Netanyahu told CBS's "60 Minutes".
He added that Trump was on the same page about the enriched uranium, though the president said in a recent interview that the US could remove it "whenever we want," and that it was "very well surveilled" where it is now.
Trump is expected to press President Xi Jinping of China — a major buyer of Iranian oil — on Iran when he visits Beijing next week, a senior administration official said.
No Hormuz 'interference'
Iran imposed a blockade on the vital Strait of Hormuz early in the war, sending global oil prices soaring and rattling financial markets.
It has since set up a payment mechanism to extract tolls from shipping crossing the strait, but US officials have stressed it would be "unacceptable" for Iran to control an international waterway and the route for a fifth of the world's oil.
The US Navy, meanwhile, is blockading Iran's ports, at times disabling or diverting ships heading to and from them.
Britain and France are leading efforts to create an international coalition to secure the strait after a peace deal is secured, with both countries sending vessels to the region in advance.
But Iran insisted on Sunday that it would meet "a decisive and immediate response" should it deploy its ships to the strait.
"Only the Islamic Republic of Iran can establish security in this strait and it will not allow any country to interfere in such matters," deputy foreign minister Kazem Gharibabadi posted on X.
French President Emmanuel Macron later insisted that his country had "never envisaged" a naval deployment in the Strait of Hormuz, but rather a security mission "coordinated with Iran".
Qatari Prime Minister Sheikh Mohammed bin Abdulrahman Al Thani told Iran's top diplomat in a call that freedom of navigation "is not open to compromise, and that closing the Strait of Hormuz or using it as a pressure card only serves to deepen the crisis", according to the Qatari foreign ministry.
'Restraint over'
Fresh drone attacks in the Gulf on Sunday were the latest to rattle the ceasefire after a string of flare-ups in recent days.
The United Arab Emirates said its "air defence systems successfully engaged two UAVs launched from Iran" in what would be, if confirmed, only the second strike on a Gulf country since the start of the month-old truce.
Iran's neighbour Kuwait reported an attempted attack as well, saying its armed forces dealt with "a number of hostile drones in Kuwaiti airspace".
And Qatar's defence ministry said a freighter arriving in its waters from Abu Dhabi was hit by a drone off the port of Mesaieed.
The United Kingdom Maritime Trade Operations centre said the bulk carrier reported being struck by an unknown projectile, causing "a small fire" but no casualties or environmental impact.
There was no immediate claim of responsibility, but Iran's Fars news agency reported that "the bulk carrier that was struck near the coast of Qatar was sailing under a US flag and belonged to the United States".
In a social media post on Sunday, the spokesman for the Iranian parliament's national security commission warned the United States: "Our restraint is over as of today."
"Any attack on our vessels will trigger a strong and decisive Iranian response against American ships and bases," Ebrahim Rezaei said.
Iran's Revolutionary Guards Corps had threatened the day before to target US interests in the Middle East if its tankers came under fire — as it did on Friday when a US fighter jet fired on and disabled two Iran-flagged vessels in the Gulf of Oman.
Iran's military chief Ali Abdollahi also met the country's supreme leader Mojtaba Khamenei and received "new directives and guidance for the continuation of operations to confront the enemy", according to Iranian state television.
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