Iran celebrates agreement with US, threatens Israel on Lebanon attacks

China's top diplomat told his Iranian counterpart on Wednesday it was "key" for all sides to "genuinely implement" their commitments after Tehran and Washington reached a memorandum of understanding to end their war, Beijing's foreign ministry said.

"The dawn of peace has already emerged, the key part of the next step is for all parties to genuinely implement their commitments and eliminate interference from various sides," Wang Yi told Abbas Araghchi in a phone call.

"China has consistently supported Iran's reasonable and legitimate claims and Iran's efforts in safeguarding its own sovereignty and security," Wang added.

Italy's embassy to Tehran will re-open on Friday after more than three months of closure because of the Middle East war, the foreign ministry said on Wednesday.

"Our embassy in Tehran will re-open its doors on Friday," Foreign Minister Antonio Tajani told Italy's parliament.

After the US and Israel began the war with air strikes on Iran, Italy in early March decided to temporarily close its embassy and move its staff to neighbouring Azerbaijan for security reasons.

"Our ambassador will return to the Iranian capital with all our diplomats and foreign ministry officials," Tajani said.

"In a complex region like the Middle East, caution is essential. But, for the first time, after weeks of war and faltering negotiations, a tangible glimmer of peace is emerging," he said.

Five Israeli soldiers have been wounded by a Hezbollah first-person view (FPV) drone according to the Israeli military.

The drone struck next to a tank in Nabatieh, wounding four, with another exploding on a vehicle, evacuating the wounded soldiers, wounding another, the Times of Israel reported.

President Donald Trump said on Wednesday that the US would have to "start the process again" if Iran does not agree to a final deal resolving nuclear issues.

"I would think they would do it," Trump said on the sidelines of the Group of 7 conference in France, asked about the prospects for a deal. "If they don't, then that's, you know, that's okay. We'll have to start the process again, and we don't lose."

International shipping companies welcomed the agreement between the US and Iran to end their war and reopen the Strait of Hormuz, but cautioned on Tuesday that it remains too early to resume normal operations through the vital waterway.

German shipping giant Hapag-Lloyd told The New Arab it is reassessing the security situation before sending vessels through the strait, despite expectations that conditions could improve in the coming days.

"Our vessels will be ready to transit the Strait of Hormuz from this weekend. However, we will only proceed when it is safe to do so," Nils Haupt, the company's Senior Director of Group Communications, said.

"Final transit dates remain dependent on decisions by the Iranian authorities and our continuous assessment of the security situation," he added.

Denmark's Maersk also welcomed the breakthrough but said it was too early to determine its practical impact on maritime trade.

Read more about the concerns of ships transiting through the Strait of Hormuz below:

An Iranian official said Wednesday that the funeral procession for the late Supreme Leader Ayatollah Ali Khamenei, who was killed by US-Israeli strikes in February, will pass through Iraq before his burial in Iran.

In a video carried by state media, Tehran Mayor Alireza Zakani said the farewell ceremonies and funeral for Khamenei will be held from 4 to 9 July.

"On 8 July 2026, they will take place in Iraq, and on 9 July 2026, God willing, in Mashhad" in Iran, where Khamenei will be buried, he added.

US President Donald Trump has publicly criticised Israel's military tactics in Lebanon, saying whole residential buildings should not be bombed in the alleged pursuit of Hezbollah fighters.

Speaking at the G7 summit in Evian, France, on Tuesday, Trump said too many people had been killed and urged Israeli Prime Minister Benjamin Netanyahu to act "more responsibly" in Lebanon.

"You don't have to destroy an apartment building every time you're looking for someone, because there are a lot of people in those apartment buildings, and they're not all Hezbollah," Trump said.

Read more below: 

Lebanese President Joseph Aoun said Wednesday that the country's negotiations with Israel in Washington were independent of the US-Iran deal.

"The assurances we have received, and what we insist on, is that Lebanon's path in the negotiations is independent, though we are certainly for a ceasefire and for any country that helps us, including Iran," Aoun said, according to a statement from his office, after Iran and Pakistan said Lebanon was included in the US-Iran deal.

"The Lebanese state is sovereign in its decision-making, and for the first time, it is the one conducting the negotiations, and nobody is negotiating for us," Aoun said ahead of a fifth round of Israeli-Lebanese talks next week.

Lebanese media reports Israeli airstrikes in the Nabatieh area.

“Enemy warplanes launched a raid on the outskirts of the town of Kfar Tebnit, towards the Ali Taher hill,” reports the National News Agency.

Russian Foreign Minister Sergei Lavrov spoke to his Iranian counterpart, Abbas Araqchi, on Wednesday about the US-Iranian agreement to end the US-Israeli war on Iran, and noted Moscow was ready to help, Lavrov's ministry said.

Russia is ready to support efforts to resolve the crisis "based on its unique experience and expertise", the foreign ministry said.

US President Donald Trump and Egypt's President Abdel Fatah el-Sisi addressed the media at the G7 in France, focusing on US-Iran negotiations.

"What is really happy in the market that has gone wild, it’s gone through the roof. And oil has tumbled down," said the US president. "That speaks louder than words."

Asked if the agreement is "final", Trump said: "No, it's not final."

"It's a Memorandum of Understanding. And if I don't like it, we'll go back to shooting at them, dropping bombs on their head," he added. "If I don't like it, if they don't behave, we'll go right back to dropping bombs right smack in the middle of their head."

The Iranian national currency recorded gains of more than 15 per cent in a matter of days, after months of sharp losses, following an understanding between Iran and the United States. The effects of this understanding, which stipulates resolving disputes between the two sides through diplomatic means, have begun to be felt positively and noticeably in Iranian markets.

According to data from the website "pashizi.com", which specialises in monitoring the free exchange market in Iran, the US dollar exchange rate declined today, Wednesday, to 152,000 tomans (The toman is a superunit of the official currency of Iran, the rial).

The exchange rate stabilised last week at 180,000 tomans.

It is noteworthy that the Iranian economy has faced severe difficulties in recent months under the weight of war costs, high inflation, and economic sanctions.

Exchange rates jumped to a historic peak last March, reaching 190,000 tomans per dollar, coinciding with the war launched by the United States and Israel on 28 February, which led the national currency to an unprecedented decline.

There is no Israeli military presence in Somaliland and no talks for Israel to open a base there, Somaliland's Defence Minister Mohamed Yusef Ali told Reuters on Wednesday.

Speaking on the sidelines of a business conference in Tel Aviv, he said Israel was training Somaliland's military and police, but called reports that Israel was in negotiations to establish a military base in Somaliland "rumours".

Israel recognised Somaliland as ​an independent state last December, a move Somalia ​rejected and termed a "deliberate attack" on its sovereignty.

Moreover, Defence Minister Israel Katz, during a meeting with visiting Somaliland President Abdirahman Mohamed Abdullahi, says the two nations have been cooperating "under the radar" for "many years."

"For many years, we cooperated under the radar in a series of operations that will remain classified. Now we are determined to bring our security cooperation to new heights, for the benefit of both peoples and for the benefit of stability in the region," he says, according to remarks published by his office.

NATO chief Mark Rutte on Wednesday hailed the US-Iran deal to end the Middle East war, saying the planned reopening of the Strait of Hormuz, would be a "massive step forward".

"The restoration of free passage through the Strait of Hormuz will be a massive step forward, and I know that many allies, through the initiative led by France and the United Kingdom, are ready to support," Rutte told a press conference in Brussels.

According to the Lebanese National News Agency, Israel carried out at least three strikes in the towns of Mansouri and Aaziyyeh in south Lebanon, causing several injuries.

Another strike was carried out in Barashit, NNA added.

Canada's Prime Minister Mark Carney on Wednesday said a US-Iran deal to end the US-Israeli war on Iran could be a "game changer" in the region and beyond.

There is "a likelihood that this memorandum of understanding agreement could be a game changer", Carney told reporters on the third day of a G7 leaders' meeting in the French town of Evian.

He pointed to encouraging discussions at the summit, including those with US President Donald Trump, on Ukraine and Lebanon.

The Canadian premier said he noted a US "change in tone with respect to Ukraine" as Kyiv seeks to end more than four years of conflict following Russia's invasion.

Oil inventories held by OECD member countries fell in May to their lowest level since 1990 as governments drew down stocks to offset the blockage of Gulf crude shipments during the Middle East war, the International Energy Agency said Wednesday.

The drawdown since the start of the conflict has reached 163 million barrels in the Organisation for Economic Cooperation and Development club of wealthy countries, the IEA said in its monthly report.

"Despite the significant reductions in demand for crude oil and refined products, the buffers in the system continue to erode at a record pace," the agency said.

To ease the burden from soaring oil prices due to Tehran's effective closure of the Strait of Hormuz, the IEA organised coordinated stock releases of 400 million barrels to the global market, of which 252 million have been released as of June 12.

"The flow of emergency stocks is expected to decelerate somewhat in June and July," the agency said, after a deal was announced this week to end the war that began on February 28 with US and Israeli strikes on Iran.

But the impact of high prices will weigh heavily on demand through this year, with an expected decline of 1.1 million barrels a day compared to 2025 levels.

"We see growth rebounding to 2 mb/d in 2027, as a normalisation of trade flows, lower oil prices and an improving economic outlook contribute to the recovery," the IEA said.

Lebanese President Joseph Aoun discussed the situation in southern Lebanon with the Commander of the United Nations Interim Force in Lebanon (UNIFIL), General Deodato Abagnaara, in the presence of the Acting Special Coordinator of the United Nations in Lebanon, Imran Riza.

A statement by the Lebanese presidency said that the work of UNIFIL was discussed in light of the difficulties and harassment facing its movements in the area of operations, as well as the period after the end of these forces' work in the south.

According to the same statement, "President Aoun renewed his condolences to the martyrs of the international forces in the south, noting their sacrifices for the sake of peace in Lebanon."

Oil prices extended losses on Wednesday, and most equity markets rose, fuelled by the US-Iran deal, with attention now on peace talks and the reopening of the crucial Strait of Hormuz.

Crude has tumbled more than 10 per cent this week on optimism for a lasting agreement between the two countries after more than three months of conflict that rattled energy markets and revived inflation.

The latest selling was boosted by a Wall Street Journal report that Washington could ease sanctions on Iranian crude as part of the deal to end the war, allowing Tehran to sell crude and refined oil products immediately.

Attention now turns to Friday's official signing ceremony in Switzerland and the subsequent negotiations that will focus on the fate of Tehran's nuclear programme and a plan for the lifting of international economic sanctions.

Meanwhile, oil industry experts and shipping companies have cautioned that restoring normal operations after the strait's near-shutdown will take time.

Reuters quoted an informed source as saying that the framework agreement between the United States and Iran includes a $300 billion special fund to stimulate investment, with more than half of this amount already pledged.

The source, who is familiar with the agreement and requested anonymity because the plan has not yet been announced as Washington and Tehran prepare to sign on Friday, noted that the fund is designed to give both sides an economic incentive to conclude a final agreement to end the war.

While it was previously reported that the fund exists, what is new is the revelation that more than half of the amount has been pledged and that it will consist entirely of private sector funds.

The source said that the new fund is a private investment tool, not a reconstruction or compensation program, and will not include any government funds or grants, adding that companies based in the United States, the Arab Gulf states, Asia, South America, and Africa have agreed to commit to financing the energy, logistics, manufacturing, and transportation sectors.

A high-ranking Iranian source told Reuters that Tehran initially requested $400 billion in compensation for war damage from the United States, but Washington said it would not provide that amount. Then the idea of a fund emerged, to be called the Reconstruction and Development Fund.

The Iranian source added that the mechanism includes the contribution of countries in the region in various ways, including obtaining loans, establishing credit lines, or directly financing the reconstruction of sites damaged in the war, including facilities such as the Mubarakah Steel Complex, oil refineries, airports, and infrastructure damaged by the war on a broader scale.

The United Nations Office for the Coordination of Humanitarian Affairs said that some displaced families in Lebanon began to cautiously return to their homes after the announcement of the agreement between the United States and Iran.

The office explained in a statement that about 2,700 people in the South Governorate left collective shelters the day before yesterday, Monday, adding that it remains unclear whether “these movements represent a temporary return to evaluate homes and property or a sustainable return.”

He added that the number of displaced people residing in collective shelters decreased by about 10,000 people during the past four days, from about 134,000 last Friday to about 124,000 as of Tuesday evening.

The office indicated that despite the decrease in the intensity of violence since last Sunday, there are still reports of incidents in southern Lebanon, which directly affect the ability of residents to inspect their homes or move around.

Inside a narrow room in a Beirut displacement shelter, Fatima Bittar keeps the door slightly ajar. Not for air, but because she cannot afford to be alone if something goes wrong.

The 54-year-old widow was displaced from Bourj el-Shemali in southern Lebanon since early March when Israel's missiles came raining down.

Since then, she's been keeping her distance from the other residents as much as the overcrowded school building allows. She has lymphoma, a compromised immune system, and no treatment plan that anyone here can honour.

"I have no immunity," she tells The New Arab. "So I stay in the room all the time."

For the three years leading up to Israel's war and invasion, Fatima's life was structured around a precise medical protocol.

Read more below:

The rail corridor from Oman to Istanbul will revive sections of the Hejaz Railway, but can it help replace vulnerable waterways like the Strait of Hormuz? Sabena Siddiqui examines this question.

Read more below:

The leaders of the G7 group welcomed the announcement of a deal to stop the US-Israeli war on Iran, and expressed willingness to contribute to its implementation, according to a statement cited by Reuters.

They also committed to reducing dependence on the Strait of Hormuz and increasing their energy reserves.

Israeli strikes continued in southern Lebanon this morning, with attacks reported in Nabatieh al-Fawqa, and a drone strike hit Ansariyeh on the coast. 

Hezbollah also noted yesterday evening heavy clashes with the Israeli military near the southern city of Nabatieh.