Main developments
The ceasefire in the Middle East appeared fragile, with Iran threatening to withdraw over a wave of Israeli attacks in Lebanon.
US President Donald Trump has dispatched a delegation led by vice-president JD Vance, Middle East special envoy Steve Witkoff and the president’s son-in-law Jared Kushner to Islamabad for talks this weekend.
Vance said Iran’s expectation that Israel would halt its bombardment of Lebanon as part of the two-week ceasefire deal stemmed from a “legitimate misunderstanding”.
Mohammad Bagher Ghalibaf, Iran’s parliamentary Speaker, said the ceasefire agreement had been breached three times, making the upcoming talks “unreasonable”, while a senior military commander said Tehran was “preparing to respond” to Israeli attacks in Lebanon.
Iran also halted tanker traffic through the Strait of Hormuz in response to strikes it said violated the terms of the truce.
Israel said it did not consider the ceasefire to include Lebanon while Trump also said the country was “not included in the deal”.
Pakistani Prime Minister Shehbaz Sharif, a critical figure in brokering the deal, called on the US, Israel and Iran to “respect” the ceasefire.
Gulf states continued to face attacks. Saudi Arabia’s East-West pipeline that carries crude from the Gulf to the Red Sea was struck.
Wall Street’s S&P 500 closed 2.5 per cent up while the technology-heavy Nasdaq Composite gained 2.8 per cent. Brent, the international crude benchmark, fell more than 13 per cent to settle at $94.75 a barrel.
Vance suggests Iran’s expectation Israel would stop bombing Lebanon was ‘misunderstanding’
US vice-president JD Vance suggested that Iran’s expectation that Israel would halt its bombardment of Lebanon as part of the two-week ceasefire deal stemmed from a “legitimate misunderstanding”.
“I think the Iranians thought that the ceasefire included Lebanon, and it just didn’t,” Vance told reporters on the tarmac in Budapest, where he had travelled to meet Hungarian Prime Minister Viktor Orbán. “We never made that promise.”
“What we said is that the ceasefire would be focused on Iran, and the ceasefire would be focused on America’s allies, both Israel and the Gulf Arab states.”
Vance added that “the Israelis, as I understand it” had offered “to check themselves a little bit in Lebanon, because they want to make sure that our negotiation is successful”.
US stocks close higher and oil prices tumble after ceasefire
US stocks closed higher and oil prices tumbled as investors continued to digest news of the ceasefire declared between the US, Israel and Iran last night.
Wall Street’s S&P 500 rose 2.5 per cent, while the technology-heavy Nasdaq Composite gained 2.8 per cent. Investors seemed unruffled by concerns that continued Israeli strikes on Lebanon could affect the truce.
Oil prices tumbled, with the international benchmark Brent crude falling more than 13 per cent to settle at $94.75 a barrel, its lowest level in nearly a month. While the US marker West Texas Intermediate was down more than 16 per cent, settling at $94.41 a barrel.