War returns to Iran with Israel, US strikes

Danny Danon, Israel’s ambassador to the UN, says the US-Iran agreement is “very bad” for Israel, the United States and Gulf nations, Al Jazeera reports.

In comments to Israel’s Channel 14, Danon said that by trying to end the negotiating process as quickly as possible, President Trump allowed Iran to “improve” its position.

“But we have to wait. There is no decision yet — only a framework for the continuation [of negotiations],” he says.

US President Donald Trump has rejected reports that the memorandum of understanding (MoU) with Iran includes a $300 billion reconstruction fund.

“False,” he tells reporters during a bilateral meeting with Egyptian President Abdel Fattah Al-Sisi. “You can invest if you want. What am I going to do? Say nobody’s allowed to invest?

“We’re not putting up 10 cents,” he adds.

Trump stresses that the US is not investing and does not have a reconstruction fund. When pressed on Gulf countries providing funds, he responds: “If they do it, fine. I would say they won’t be doing it for a while, until they find out the behaviour” of Iran.

US President Donald Trump has warned Iran he is ready to resume military action if Tehran does not abide by its obligations, two days ahead of the signing of an accord to end the war between the foes, AFP reports.

“No it’s not final. It’s a memorandum of understanding,” Trump said at the G7, referring to the agreement expected to be signed in Switzerland on Friday.

“If I don’t like it we will go back to shooting at them,” he added alongside Egyptian President Abdel Fattah al-Sisi.

“If they don’t behave, we’ll go right back to dropping bombs right smack in the middle of their head.”

The CEO of French petroleum firm TotalEnergies, Patrick Pouyanne, says the Saudi refinery hit by drones early in the conflict is now operating at 70 per cent capacity, Al Jazeera reports.

Speaking at a ⁠hearing convened ⁠by the French lower house’s economic affairs commission ‌on the Middle East crisis, Pouyanne said the refinery will probably not be fully repaired until the beginning of 2027.

Alert sirens have been activated because of the intrusion of “hostile aircraft” into the airspace of the village Zar’it, a military update says, according to Al Jazeera.

An investigation is currently underway, it added.

Nato chief Mark Rutte has said that the US was not stepping back from Europe by announcing cuts to the forces it makes available to the alliance, according to AFP.

“In some cases this has been cast as a problem — as the US pulling away from its allies. But that is not the reality,” Rutte said on the eve of a meeting of Nato defence ministers.

Nato chief Mark Rutte hails the US-Iran deal to end the Middle East war, saying the planned reopening of the Strait of Hormuz, would be a “massive step forward”, AFP reports.

“The restoration of free passage through the Strait of Hormuz will be a massive step forward, and I know that many allies, through the initiative led by France and the UK, are ready to support,” Rutte told a press conference in Brussels.

A Chinese Foreign Ministry spokesperson says Beijing will help with “recovery and reconstruction” efforts in the two countries, Al Jazeera reports.

“China is deeply saddened by the humanitarian disaster” caused by the wars in Iran and Lebanon, Lin Jian told reporters in the capital.

“Considering the real situation in the relevant countries, China has decided to offer humanitarian aid to Iran and Lebanon … to further assist the people there in recovery and reconstruction as well as improving their economy and livelihood,” Lin said.

Pope Leo XIV has welcomed a deal on ending the Middle East war announced between Iran and the United States as a result of “encouraging work in dialogue and negotiation,” AFP reports.

He also spoke of the “painful” news about the war in Ukraine and prayed for “paths of dialogue… to make a just and lasting peace possible”.

The International Energy Agency (IEA) has said that oil inventories held by Organisation for Economic Cooperation and Development (OECD) member countries fell in May to their lowest level since 1990 as governments drew down stocks to offset the blockage of Gulf crude shipments during the Mideast war, according to AFP.

The drawdown since the start of the conflict has reached 163 million barrels in the OECD club of wealthy countries, the IEA said in its monthly report.

Lebanese President Joseph Aoun has discussed situation in southern Lebanon with UN Interim Force in Lebanon (Unifil) Commander Diodato Abagnara.

“The discussions focused on … the work of Unifil in light of the difficulties and obstructions facing its movements within its area of operations,” Lebanese presidency has said in a social media post on X.

It has added that the meeting also “addressed the period following the conclusion of peacekeeping force’s mission in southern Lebanon”.

The world oil market will recover gradually from the closure of the Strait of Hormuz before tipping into a significant surplus in 2027, the International Energy Agency (IEA) said in its monthly oil market report, according to Reuters.

“If the deal holds, exports and production from the Gulf should see a gradual recovery not least because Iranian oil exports can fully resume once the US blockade is lifted,” the agency, which advises industrialised countries, said.

The oil market will then enter a significant supply overhang next year, the IEA said in its first look at 2027, with global oil supply set to surge by 8 million bpd and demand rising by just 2 million bpd.

Amnesty International warns that the Israeli army’s mass forced displacement orders in Lebanon amount to “war crimes” under international law, AlJazeera reports.

“In parts of southern Lebanon, the Israeli military’s forced displacement of civilians and prevention of their return amounts to unlawful transfer, which is a war crime,” the report has said, citing the UK-based rights group.

It made the remarks in a statement, outlining findings from its investigation into Israeli military orders.

It said the Israeli army has “radically expanded” its use of such orders, displacing hundreds of thousands of people across Lebanon.

“Instead of forcibly uprooting communities and designating entire swathes of Lebanese land as no-go zones for civilians, Israeli forces must immediately withdraw from Lebanese territory,” said Kristine Beckerle, Amnesty International’s deputy regional director for the Middle East and North Africa.

According to the group’s statement, the Israeli military declared about 4.6 per cent of Lebanon a no-go zone on November 28, 2024, a day after a previous ceasefire took effect.

It added that in 2026, just three days after an April 17 ceasefire announcement, the restricted area was expanded to about 6 percent of the country, designated a “Forward Defence” zone, with residents ordered not to return to multiple villages that were previously home to tens of thousands of civilians.

Deputy Prime Minister and Foreign Minister Ishaq Dar held a phone call with Egyptian Foreign Minister Badr Abdelatty, the Foreign Office (FO) said.

“The two leaders exchanged views on the recent understandings reached between the United States and Iran and the forthcoming signing of the memorandum of understanding in Bürgenstock, Switzerland, on Friday,” it said.

“They also discussed preparations for the upcoming Regional Four Foreign Ministers’ meeting later this month and agreed to remain in close contact,” it added.

The Middle East crude market has weakened sharply this week, slipping into discounts, Reuters data showed, after the US and Iran agreed a framework deal to reopen the crucial Strait of Hormuz, brightening the global supply outlook, according to Reuters.

With Asian refining demand led by China still subdued after months of run cuts, hopes of higher supply after the deal pushed Dubai and other Middle East benchmarks into contango and opened rare arbitrage opportunities to Europe and the United States.

Benchmark Dubai’s premium to swaps slipped into a discount of 46 cents on Tuesday, the first contango structure since January, Reuters’ data showed, after hitting pre-war levels of $2.06 per barrel on Monday.

Similarly, spot Oman, Murban differentials flipped into discounts of 67 and 49 cents, respectively on Tuesday.

Deputy Prime Minister and Foreign Minister Ishaq Dar has said that Pakistan is “pleased to facilitate the repatriation of 30 Iranian nationals”.

In a post on the social media platform X, he said that this number included “eight Iranian fishermen rescued at sea by the British vessel MMA Valour after their boat ran aground, and 22 Iranian crew members from the vessel Lenore/Davina, recently interdicted by US authorities”.

“Both groups are expected to transit through Karachi in the coming days,” he said.’

“We remain in close coordination with the Iranian, US and UK authorities to ensure the safe transit and early return of our Iranian brethren to their homeland. Pakistan remains committed to humanitarian cooperation and to extending every possible assistance to our Iranian brothers,” he said.

Canadian Prime Minister Mark Carney, who says he has seen the MoU agreed by the US and Iran, calls it a “well-structured” and “positive” agreement that he “absolutely” supports, according to AlJazeera.

“We’re very pleased with the deal that’s been struck,” Carney said, while speaking to CNN on the sidelines of the G7 summit, adding that it is a “game-changer”.

“It sets the groundwork to ensure Iran doesn’t have a nuclear weapon,” he continued. “It sets the groundwork for a reintegration over time of the economies in the region. It sets the groundwork for a solution in Lebanon, which we discussed today. So it’s positive.”

Carney also told CNN the deal provides Iran with “a big financial incentive” if it meets its commitments in the coming months, such as opening the Strait of Hormuz and negotiating the transfer of its enriched uranium.

The Israeli army is preparing for a prolonged presence in Lebanon despite a US-Iran agreement that ended the war across multiple fronts, according to Anadolu

The army is “ready to remain in Lebanon for a long period” if instructed to do so by Israel’s political leadership, Israel’s public broadcaster KAN reported, citing unnamed security sources.

The sources added that the army is prepared for “all scenarios in Lebanon,” even as Washington and Tehran move toward signing the agreement on Friday in Switzerland.

According to the report, Israeli attacks in southern Lebanon remain ongoing alongside gunfire toward northern Israel.

Israeli forces carried out airstrikes on several areas in south Lebanon,

despite a peace deal in the Middle East war that includes Lebanon, AFP reports.

Lebanon’s National News Agency said Israeli warplanes launched raids targeting the Nabatieh al-Fawqa area and the eastern outskirts of neighbouring town Kfar Tebnit.

The Israelis also launched a drone strike on the town of Ansariyeh in the Zahrani area, NNA reported.

The leaders of the G7 group of nations have welcomed the announcement of a deal between the US and Iran and expressed willingness to contribute to its implementation, according to Reuters.

Chinese Foreign Minister Wang Yi has called for firm commitment to a ceasefire in the Middle East, urging all parties to work toward laying the foundation of a “sustainable security architecture in the region,” Reuters reports citing state news agency Xinhua.

Speaking at a press conference on Wednesday alongside the release of a white paper on China’s vision for global governance, Wang warned of mounting instability in the international order.

“New challenges in quick succession bring intertwining global crises,” he said, adding that “the ship of civilisation has entered dangerous waters with hidden reefs and violent storms.”

Gold prices were steady, near a one-week high, as investors awaited further details on the US-Iran agreement and the Federal Reserve’s policy decision from Kevin Warsh’s debut meeting as Chair, Reuters reports.

Spot gold was flat at $4,331.29 per ounce, as of 0420 GMT. US gold futures for August delivery was down 0.1 per cent at $4,351.40.

Oil prices inched lower, extending the previous session’s declines as investors assessed the US-Iran peace deal, though uncertainty over the full resumption of shipping through the Strait of Hormuz limited further falls, Reuters reports.

Brent crude futures dipped 16 cents, or 0.2 per cent, to $78.80 a barrel by 0340 GMT, while US West Texas Intermediate fell 25 cents, or 0.3pc, to $75.80 a barrel.

Both benchmarks fell about 5pc for a second straight session on Tuesday to stand at three-month lows, on hopes that a US-Iran deal would allow oil flows through the Strait.

“Markets are broadly stripping out the embedded geopolitical risk premium in oil prices,” said Priyanka Sachdeva, senior market analyst at Phillip Nova.