The US demanded Thursday that Iran reopen the Strait of Hormuz after the Islamic Republic closed the waterway in response to Israeli attacks against the Hezbollah militant group in Lebanon. Iran's move cast doubt over whether an already precarious ceasefire to end more than a month of war would hold.
The United States and Iran both claimed victory after reaching the agreement, and world leaders expressed relief, even as more drones and missiles hit Iran and Gulf Arab countries. Israel intensified its attacks in Lebanon, hitting several commercial and residential areas in Beirut without warning. At least 112 people were killed and hundreds were wounded in one of the deadliest days in the latest Israel-Hezbollah war.
Finance Minister Nicola Willis told Breakfast the conflict in the Middle East had "made the whole world poorer", saying that inflation was bad for growth in New Zealand. (Source: Breakfast)
The fresh violence threatened to scuttle what US Vice President JD Vance called a "fragile" deal.
"Aggression towards Lebanon is aggression towards Iran," General Seyed Majid Mousavi, aerospace commander of Iran's Revolutionary Guard, wrote on X. He warned that Iranian forces were preparing a "heavy response" without revealing details.
Iran accused the US of violating three clauses of its framework for a deal.
Iranian Foreign Minister Abbas Araghchi insisted that an end to the war in Lebanon was part of the ceasefire agreement with the US. Israeli Prime Minister Benjamin Netanyahu and US President Donald Trump said the truce did not cover Lebanon.
"The world sees the massacres in Lebanon," he said in a post on X. "The ball is in the US court, and the world is watching whether it will act on its commitments."
White House press secretary Karoline Leavitt said the closing reported in Iranian state media was "completely unacceptable." She repeated President Donald Trump's "expectation and demand" that the strait be reopened.
US Defence Secretary Pete Hegseth said American and Israeli forces had achieved a "capital V military victory" and that the Iranian military no longer posed a significant threat to US forces or the region. The Iranian military said the country forced Israel and the US to accept its "proposed conditions and surrender".
Much about the agreement was unclear as the sides presented vastly different visions of the terms.
Iran said the deal would allow it to formalise its new practice of charging ships passing through the strait, a crucial transit lane for oil. But the details were not clear, nor was it known whether vessels would feel safe using the channel or whether ship traffic had resumed. It also was unclear whether any other country agreed to this condition. The White House said Trump is opposed to tolls for ship passage through the strait.
Pakistan, which helped to mediate the deal, and others said fighting would pause in Lebanon, where Israel has launched a ground invasion against the Iran-backed Hezbollah militant group. Israel said it would not, and strikes hit Beirut.
The fate of Iran's missile and nuclear programmes — the elimination of which were major objectives for the US and Israel in going to war — also remained unclear. Trump said the US would work with Iran to remove buried enriched uranium, though Iran did not confirm that.
Ceasefire terms are murky
Trump initially said Iran proposed a "workable" 10-point plan that could help end the war the US and Israel launched on February 28. But when a version in Farsi emerged that indicated Iran would be allowed to continue enriching uranium — which is key to building a nuclear weapon — Trump called it fraudulent without elaborating.
Vance later said the deal was being misrepresented within Iran, though he did not offer details.
Leavitt said Iran's original, 10-point plan was "fundamentally unserious, unacceptable and completely discarded". But a new, 15-point plan Iran presented Tuesday could now "align with our own" proposal for peace, she said.
The White House also said Vance would lead the American negotiating team in talks in Pakistan aimed at finding a permanent end to the war. Pakistan said the talks could begin in Islamabad as soon as Friday.
Iran's demands for ending the war include a withdrawal of US combat forces from the region, the lifting of sanctions and the release of its frozen assets.
United Nations Secretary General Antonio Guterres's personal envoy arrived in Iran for talks on "the way forward".
Israeli Chief of Staff Lieutenant General Eyal Zamir said Israel will continue to "utilise every operational opportunity" to strike Hezbollah. The Israeli military said it struck more than 100 targets within 10 minutes across Lebanon, the largest wave of strikes since March 1.
Lebanese President Joseph Aoun condemned the Israeli attacks as "barbaric". Arab League chief Ahmed Aboul Gheit accused Israel of "persistently seeking to sabotage" the Iran ceasefire deal.
Hezbollah has not confirmed if it will abide by the ceasefire, though the group has said it was open to giving mediators a chance to secure an agreement. An official, speaking on condition of anonymity because he was not authorised to comment publicly, said the group would not stop firing at Israel unless Israel agreed to do the same.
Iran and Oman will collect shipping fees in Strait of Hormuz
Iranian attacks and threats deterred many commercial ships from using the strait, through which 20% of all traded oil and natural gas passes in peacetime. That roiled the world economy and raised the pressure on Trump both at home and abroad to find a way out of the standoff.
The ceasefire may formalise a system of charging fees in the strait that Iran instituted — and give it a new source of revenue.
The plan allows for both Iran and Oman to charge ships, according to a regional official who spoke on condition of anonymity to discuss negotiations they were directly involved in. The official said Iran would use the money it raised for reconstruction.
That would upend decades of precedent treating the strait as an international waterway that was free to transit and will likely not be acceptable to the Gulf Arab states, which also need to rebuild after repeated Iranian attacks targeting their oil fields.
Iran's nuclear and missile threats survive
US–Israeli strikes have battered Iran and its leadership, but they have not entirely eliminated the threats posed by Tehran's nuclear programme, its ballistic missiles or its support for regional proxies, like Hezbollah. The US and Israel said addressing those threats was a key justification for going to war.
Trump said the US would work with Iran to "dig up and remove" enriched uranium that was buried under joint US–Israeli strikes in June. He added that none of the material had been touched since. There was no confirmation from Iran.
Hegseth told a Pentagon briefing that the US would do "something like" last June's joint strikes with Israel on Iranian nuclear sites if the country refuses to surrender its enriched uranium voluntarily.
Netanyahu warned in a televised address that his country was "ready to return to fighting at any time. Our finger is on the trigger".
Tehran insisted for years that its nuclear programme was peaceful, although it enriched uranium up to 60% purity, a short, technical step from weapons-grade levels.
Airstrikes reported after ceasefire announcement
Shortly after the ceasefire announcement, Bahrain, Israel, Kuwait, Saudi Arabia and the United Arab Emirates all issued warnings about incoming missiles from Iran. That fire stopped for a time, then hostilities appeared to restart.
An oil refinery on Iran's Lavan Island came under attack, according to Iranian state television. The island is home to one of the terminals that Iran uses to export oil and gas.
A short time later, the United Arab Emirates' air defences fired at an incoming Iranian missile barrage. Kuwait said three power and water desalination plants were badly damaged after 28 Iranian drones were launched at the country. Saudi Arabia said it intercepted nine drones.
More than 1900 people had been killed in Iran as of late March, but the government has not updated the war's toll for days.
In Lebanon, where Israel is fighting Iran-backed Hezbollah militants, more than 1500 people have been killed, and 1 million people have been displaced. Eleven Israeli soldiers have died.
In Gulf Arab states and the occupied West Bank, more than two dozen people have died, while 23 have been reported dead in Israel, and 13 US service members have been killed.
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