Indirect US-Iran talks continue via mediators in New York, as both sides prepare for peace or war

Wall Street stocks moved sideways early Tuesday as oil prices retreated while the booming artificial intelligence sector remained in focus as top tech executives headed to the White House.

Crude prices were down more than two percent following a report that showed a rise in Middle East oil exports despite the US-Iran war.

About 10 minutes into trading, the Dow Jones Industrial Average was down 0.1 percent at 51,415.85.

The broad-based S&P 500 was flat at 7,684.06, while the tech-rich Nasdaq Composite Index climbed 0.1 percent to 26,839.73.

Major US indices finished lower Monday as Treasury bond yields rose further to multi-year peaks. Yields were little changed early Tuesday.

US artificial intelligence developer Anthropic meanwhile warned of potential "existential risks to humanity" in the prospectus for an initial public offering of shares, The Financial Times reported.

The document also pointed to plans to spend $518 billion in the coming years.

Anthropic CEO Dario Amodei was expected at a White House gathering Tuesday with other AI leaders.

"Right now, the market remains very dependent upon the AI trade," said Interactive Brokers' Steve Sosnick.

Large explosions have been heard in the town of Mansouri, south of Tyre, Lebanon’s National News Agency  (NNA) reported.

Earlier, NNA reported that Israeli forces blew up several houses in Majdal Zoun, southern Lebanon.

Israel’s election is providing an early test of how AI-generated propaganda can reshape political campaigning, voter behaviour, and public trust, writes Jessica Buxbaum.

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The UN envoy for Yemen said Tuesday he met with Houthi negotiators over the weekend in efforts to avert further escalation in Yemen amid fierce battles on the country's western coast between the Iran-backed Houthis and the Saudi-supported, but fragmented, government forces.

The renewed violence, which has killed hundreds and displaced tens of thousands, is the latest twist in Yemen’s conflict, which began in 2014 when the Iran-backed rebels took over the capital, Sanaa, forcing the country's government to settle into exile in Saudi Arabia. The kingdom entered the war a year later with a multinational coalition.

In an interview with The Associated Press in Cairo, Hans Grundberg said his meeting in Muscat with the Houthis' chief negotiator, Mohammed Abdul-Salam, aimed to explore "if there are ways of how to avoid seeing the current escalation go even further."

He also held talks in the Saudi capital, Riyadh, with the internationally recognized government and regional powers, including Saudi Arabia, which has been the main target of the Houthis' latest escalation that he described as "unprecedented" and "dramatic."

The United States has granted Iraqi airlines a sanctions waiver allowing them to fly Iranian pilgrims in and out of the Iraqi city of Najaf, holy to Shia Muslims, an Iraqi government official and an airport source told AFP.

The Iraqi government had on Saturday said it was in talks with the US to seek such an exemption after sanctions on Iran's aviation sector took effect.

Israeli Prime Minister Benjamin Netanyahu on Tuesday said there were "indications" that Israel's enemies could try to attack ahead of elections scheduled for the end of October, without giving details.

"We have indications that ahead of the elections our enemies will try to attack us. So... I am sending you a message: Don't mess with us, not now and not ever. Our long arm will reach you anywhere, anytime," Netanyahu said at an air force base, according to a video published by his office.

An "unknown projectile" struck a ship in the Strait of Hormuz, sparking a fire on board that has been extinguished, a British maritime agency reported Tuesday.

The ship was hit on Monday evening but the crew were safe, the United Kingdom Maritime Trade Operations Centre (UKMTO) said.

"The fire has since been extinguished and the vessel is underway," the agency said. "There has been no reported environmental impact or damage assessment."

The Strait of Hormuz is currently at the centre of the Middle East war between Iran and the United States.

Around a fifth of the world's oil and liquefied natural gas passed through the strategic shipping lane before the war.

But since the conflict broke out, Tehran has been blocking the passage of commercial ships, firing on vessels it accuses of unauthorised crossings.

Washington has responded with a counterblockade of Iranian ports in an effort to prevent Tehran from exporting its oil.

Israel’s Attorney General, Gali Baharav-Miara, has officially called on the Israeli Supreme Court to approve the disqualification of Sami Abu Shehadeh, head of the National Democratic Assembly (Balad), from running in the upcoming parliamentary elections.

The move follows the Central Elections Committee’s decision to ban Abu Shehadeh, pushing the high-stakes legal battle over 1948 Palestinian political representation directly to the Supreme Court. The disqualification bid, initially spearheaded by far-right figures including Itamar Ben-Gvir, was approved by the Central Elections Committee—notably with the backing of its chair, Supreme Court Justice Noam Sohlberg. The petition against Abu Shehadeh primarily centers on an op-ed he penned on October 8, 2023, which critics cite as justification for the ban.

Historically, the Israeli Supreme Court has overturned committee decisions to bar Arab parties and lawmakers; however, the Attorney General’s formal endorsement of the ban, coupled with the court’s increasingly conservative makeup, marks a significant and unprecedented shift that raises serious concerns over freedom of expression and the future of Palestinian political participation inside Israel.

Gen. Hossein Mohebbi, spokesman for the Revolutionary Guard, held a news conference dubbed "A letter to the American people" in Tehran, Iran's capital.

He said that the only way for the war to end is for Washington to admit defeat and leave—a message apparently meant for the US public just weeks ahead of the 3 November midterm elections for the US Senate and Congress.

Later in remarks to The Associated Press, Mohebbi urged Americans to take to the streets and protest Trump's policies.

He accused the United States of using Iran's nuclear program as a ruse to "plunder Iran's wealth" and to turn the country "back into a colony." 

Iran’s currency fell to a new record low on Tuesday, with traders in Tehran exchanging more than 2.5 million rials to the U.S. dollar.

The latest decline came just 27 days after the rial hit its previous record of 2.2 million to the dollar on Sept. 2. The currency has repeatedly reached new lows since the war began in February.

The Jerusalem Islamic Waqf reports that 907 Israeli settlers, under the protection of Israeli police, stormed the Al-Aqsa Mosque compound in occupied East Jerusalem earlier this day.

The attacks occurs during Sukkot, a Jewish holiday, and follows multiple stormings into the compound this week and throughout the years.

 Russia does not want Iran to quit the nuclear non-proliferation treaty and counts on it remaining a party to the agreement, the Kremlin said on Tuesday.

Kremlin spokesman Dmitry Peskov was responding to comments from Iranian officials about Tehran's possible withdrawal from the treaty, which commits Tehran not to develop or acquire nuclear weapons.

Russia and Iran have close ties under a strategic cooperation treaty between the two countries.

Washington has warned Lebanon that Israeli attacks could intensify unless Beirut accelerates efforts to bring Hezbollah's weapons under state control.

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The United Arab Emirates confirmed that Israeli Prime Minister Benjamin Netanyahu visited Abu Dhabi and met President Mohammed bin Zayed, a day after Israeli media revealed the previously secret trip.

The UAE's official WAM news agency confirmed the visit late on Monday, saying Mohammed bin Zayed had received Netanyahu during his trip to the country on Sunday.

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Asian stocks mostly fell and oil prices extended gains on Tuesday as hopes for a reopening of the Strait of Hormuz fade amid expectations the Federal Reserve will hike interest rates again next month.

Hopes for an easing of tensions were dashed at the weekend when Donald Trump rejected Iran's offer for a seven-day truce.

Trump said talks would resume this week but that was unable to lift the gloom on market floors, with traders contemplating further rises in inflation that will force the Fed to tighten monetary policy more.

The US president on Monday denied a report by the news outlet Axios that he offered Iran sanctions relief and the release of frozen funds, as the Middle East war drags on.

"Axios just released a story that 'Trump' offered Sanctions Relief and Frozen Funds to Iran. This is untrue. I offered them NOTHING!," Trump said on his Truth Social platform.

The story, quoting unidentified US officials, said Trump "is willing to give Iran sanctions relief and release Iranian frozen funds in return for concrete Iranian steps regarding the nuclear program".

The 80-year-old Republican called the story "a HOAX" and said the news site should withdraw it.

However, Iran's state broadcaster said the country's foreign minister, Abbas Araghchi, will meet Qatari representatives.

The talks are expected to focus on "messages exchanged with the United States through intermediaries... particularly regarding the conditions set by Iran for the reopening of the Strait of Hormuz".

Tehran officials have privately expressed pessimism about making a deal to reopen Hormuz before November's US midterm elections, Bloomberg reported sources as saying.

More than 100 Israeli settlers attacked a Palestinian village in the north of the occupied West Bank early Tuesday, wounding three members of Israel's security forces and burning two Palestinian homes, authorities and residents said.

The attack occurred while a Palestinian family attempted to return back to their home in the village of Jalud after they had been displaced by Israeli settler attacks two months earlier.

Iran's parliamentary speaker said on Tuesday no country in the region would be able to export oil if the Islamic Republic was prevented from selling its own oil, state media reported.

No regional infrastructure would be safe if Iran had no security, Mohammad Baqer Qalibaf added, according to the reports.

Iran's Revolutionary Guards' spokesperson said on Tuesday Donald Trump was a "big liar", citing the US president's statements on nuclear weapons and other issues.

"The American people need to be told the truth," Hossein Mohebbi said, adding that the US had failed in its military campaign against Iran and should leave the region.

Iran's chief negotiator Mohammad Bagher Ghalibaf said Tuesday that if his country's security was not guaranteed, no infrastructure in the region would be safe from attack, state media reported.

"In a region where we cannot sell oil, no one else will sell oil either; or if our security is not guaranteed, no infrastructure will remain safe," said Ghalibaf, who is also Iran's parliament speaker, according to video released by state TV.

The UAE's vice president will visit Saudi Arabia on Tuesday following an invitation from the defence minister, state media said, for a rare high-level meeting amid a months-long rift over Yemen.

In July, top officials and ministers from both countries began posting messages on social media about friendship and unity, signalling a rapprochement months after a public fallout over the UAE's role in Yemen.

Last December Riyadh accused Abu Dhabi of threatening its national security by supporting southern Yemeni separatists who orchestrated a brief offensive.

"His Royal Highness Prince Khalid bin Salman bin Abdulaziz, Minister of Defence, extended an invitation to his brother, His Highness Sheikh Mansour bin Zayed Al Nahyan, Vice President of the sisterly United Arab Emirates, Deputy Prime Minister and Head of the Presidential Court, to visit the kingdom tomorrow, Tuesday," the Saudi defence ministry said in a statement.

The UAE's official news agency WAM said Sheikh Mansour had accepted and would travel to Saudi Arabia on Tuesday for a "brotherly visit".

An Israeli airstrike killed Izz al-Din Al-Beik, the head of Hamas armed wing in the northern Gaza Strip, on Tuesday, Israeli and Palestinian sources said.

Medics and Hamas sources confirmed Beik's killing in the Israeli strike on an apartment building in Gaza City's Nasr neighbourhood around dawn.

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Britain’s settlement ban marks a significant shift on Israel. But without effective Palestinian leadership, this historic moment could be lost, writes G. Karmi.

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President Donald Trump on Monday denied a report by the news outlet Axios that he offered Iran sanctions relief and the release of frozen funds, as the US-Israeli war on Iran drags on.

"Axios just released a story that 'Trump' offered Sanctions Relief and Frozen Funds to Iran. This is untrue. I offered them NOTHING!," Trump said on his Truth Social platform.

The Axios story reported that Trump "is willing to give Iran sanctions relief and release Iranian frozen funds in return for concrete Iranian steps regarding the nuclear program." It quoted unnamed US officials.

The 80-year-old Republican called the story "a HOAX" and said the news site should withdraw it.

Iranian Foreign Minister Abbas Araghchi said he expected a formal answer on Tuesday from the United States to Tehran's proposal to open the Strait of Hormuz, state media reported.

Qatari intermediaries "presented ideas, and we discussed them; they are set to raise the matter with the American side once more, after which the final US response will be conveyed to us", Araghchi said late Monday.

Iran's top diplomat, who is in New York for the UN General Assembly, said "the Qataris hope this will be done by tomorrow".

"The current focus is solely on the Strait of Hormuz, and the reopening of the strait is contingent upon the fulfilment of certain conditions that we have communicated to the other side," he added.

The Strait of Hormuz lies at the heart of the conflict between the United States and Iran, which began with US and Israeli strikes on Iran in late February.