Iran to Halt Message Exchanges With US Over Israel, Tasnim Says

(Bloomberg) — Iran said it would halt talks with the US in protest for Israel’s expanded ground assault in Lebanon, escalating tensions as Washington and Tehran seek to reach an interim peace agreement.

Negotiators will suspend “talks and the exchange of documents through mediators” the semi-official Tasnim new agency reported, citing a statement. 

The report caused oil to surge and equity markets to drop, with Brent crude rising to around $97 a barrel. It fell more than 11% last week, with traders optimistic on the prospects of a deal.

Washington and Tehran have been indirectly trading messages on a draft deal — which would likely see the two sides extend their ceasefire by around two months, with Iran reopening the strait and the US lifting a blockade of Iranian ports. 

But Iranian officials said an Israeli move over the weekend to expand its military reach in Lebanon, the broadest into the country in a quarter-century, represents a violation of the ceasefire. Tehran has insisted any agreement must apply to all fighting across the region, including in Lebanon where Tehran-backed Hezbollah and Israel are engaged in a parallel war.

Iran’s Parliament Speaker and lead negotiator, Mohammad Bagher Ghalibaf, said earlier Israel’s escalation in Lebanon and the blockade on Iranian ports are “clear evidence of US noncompliance with the ceasefire,” according to a social media post.

Iran and the ‘Axis of Resistance’ — a reference to a network of Iran-backed groups in the region — have placed on their agenda the complete closure of the Strait of Hormuz and the Bab al Mandeb Strait, the report by Tasnim added.

Bab El-Mandeb — connecting the Red Sea to the Gulf of Aden — is the southern gateway to the Suez Canal, making it a key transit route between Europe, the Middle East, and Asia. A series of attacks by the Iran-backed Houthis prior to the ceasefire in Gaza significantly disrupted shipping

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