Trump tries to stop Israel's Lebanon push derailing an Iran deal

President Donald Trump is still optimistic the U.S. can reach an interim peace deal with Iran soon, after the Islamic Republic threatened to suspend talks because of Israel's escalating attacks in Lebanon.

"I think you're talking about over the next week," Trump said to ABC News late on Monday, referring to a memorandum of understanding with Iran to reopen the Strait of Hormuz. Separately, he said discussions with Iran continue "at a rapid pace."

Officials in Tehran are discussing their "final text" to send to the U.S., Iran's Mehr news agency reported on Tuesday, citing a person close to the Iranian negotiating team. The report reiterated that the country's negotiators were wary of the U.S., saying it had breached previous pledges.

The developments capped a frantic few hours in which oil prices and government bond yields jumped after Iran took umbrage at Israel's deepening invasion of Lebanon - where the Jewish state is fighting Tehran-backed Hezbollah militants - and threats to bomb parts of Beirut. Iran said it might increase restrictions on maritime traffic through the Strait of Hormuz, as well as close the Bab el-Mandeb strait at the southern end of the Red Sea and strike Israel.

Trump reacted by calling Israeli Prime Minister Benjamin Netanyahu and, according to an Axios report, swearing at him as well as accusing him of ingratitude. The U.S. leader said he also spoke to representatives of Hezbollah, deemed a terrorist organization by Washington.

Trump said Israel and Hezbollah agreed to stop firing on one another and Israeli forces had backed off on raiding Beirut, Lebanon's capital.

In a short statement, Netanyahu said Israel's position in Lebanon "remains unchanged" and his military will "continue to operate as planned in southern Lebanon." He said Israel will refrain from hitting "terrorist targets" in Beirut if Hezbollah stops firing on Israeli cities.

Netanyahu's office didn't immediately respond to a Bloomberg request for comment on the Axios article.

Fighting continued overnight in Lebanon. Israel struck the southern town of Tyre as well as a car in Nabatieh early on Tuesday, Lebanon's state-run National News Agency reported. Hezbollah said it fired rockets at an Israeli tank.

The Israeli military intercepted at least three projectiles coming in from Lebanon early on Tuesday. In the late morning, air sirens sounded in northern Israel.

Iran has insisted on a ceasefire in Lebanon being part of the memorandum of understanding with the U.S. Hezbollah attacked northern Israel with drones in early March, soon after the U.S. and Israel started bombing Iran.

Israeli troops have since invaded Lebanon and are now further into the Arab country than at any point in a quarter century. Over the weekend, they captured the Crusader-era Beaufort Castle that's about 60 kilometers (37 miles) from Beirut. Their attacks have killed more than 3,000 Lebanese and displaced over a million.

Oil prices dipped on Tuesday, with Brent falling 1.7% to $93.40 a barrel. It's slumped around 10% in the past week, with traders increasingly anticipating Washington and Tehran will clinch a deal. An agreement would allow more petroleum tankers to start moving through the Hormuz strait, even if it will probably take months for energy flows to return to normal.

Trump is under pressure to end a war that is in its fourth month and - with oil and natural gas prices surging - increasingly unpopular with Americans.

At the same time, he's wary of a backlash from Iran hawks who don't believe Tehran will stick to the terms of any accord and want more airstrikes on the country.

The U.S. and Iran started a ceasefire on April 8, though they've skirmished since then and are yet to finalize the details of the memorandum of understanding, which is meant to extend the truce by around two months and lead to the U.S. lifting a blockade of Iranian ports.

Beyond Lebanon, key sticking points include whether Iran will allow free passage of ships through the Strait of Hormuz and how many billions of dollars of Iranian funds held in countries such as Qatar will be unfrozen.

It's unclear if Iran will agree to hand over its stocks of highly enriched uranium to the U.S. or a country like China as part of the interim deal, or whether that would be left to later talks.

Those wider discussions are likely to start once the memorandum is in place and will largely focus on a U.S. demand that Iran holds off on enriching uranium for around 15 years. Washington fears Iran wants to build an atomic weapon. Tehran has always denied that, but has enriched uranium to almost military-grade levels.

Here's more on the Iran war:

•Commodities are in a "super-squeeze" that will worsen if the Strait of Hormuz remains effectively shut, according to HSBC Holdings Plc.

•Oil industry experts have told OPEC+ that supply disruptions caused by the closure of the strait will persist to the end of the year, even if the waterway reopens promptly.

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-With assistance from Carla Canivete.

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This story was originally published June 2, 2026 at 9:22 AM.