'Last chance' for US-Iran diplomacy as movement in Hormuz, Bab al-Mandeb still low

The U.S. Army has used up much of its stockpile of highly accurate long-range missiles during its five-month war with Iran, according to three people familiar with the data, raising concerns about the military's readiness for future conflicts.

The missiles are principally the Army's surface-to-surface weapons, known as Army Tactical Missile Systems (ATACMS) and Precision Strike Missiles (PrSM). The U.S. has used "virtually all" of these weapons, according to two of the sources.

The degree to which the military is running out of ATACMS and Precision Strike Missiles has not been previously reported.

The long-range munitions – which cost more than $1 million each – are an important part of the military's arsenal, allowing accurate strikes from a safe distance. U.S.-supplied ATACMS have played a key role in the war in Ukraine, allowing Ukrainian forces to attack targets inside Russia. The PrSM is a newer, more advanced generation that will replace the ATACMS, which have a shorter range.

The dramatic rundown in precision, long-range missiles means U.S. President Donald Trump may have to rely more on riskier, piloted bombing missions if he relaunches large-scale attacks on Iran.

Coast Guard forces in the Red Sea sector, in cooperation with the Yemeni Navy, rescued the crew of an Indian cargo ship that sank after it was attacked by a booby-trapped boat while sailing in the Red Sea, off the coast of Hodeidah Governorate, western Yemen.

The "December 2" agency, affiliated with the National Resistance, quoted shipping sources as saying that the cargo ship "Fayzi Nuri Olia" was attacked by a booby-trapped boat 13 nautical miles south of the city of Hodeidah, which led to its complete sinking.

The outlet reported that the crew members were transferred to a safe place, where they received medical care after the end of the rescue operation, while no official information has yet been received regarding the party responsible for the attack or the extent of other material damage.

Oil prices tumbled Tuesday after a top US official said Washington could soon reach a deal with Iran to reopen the Strait of Hormuz, easing concerns over crude supply disruptions that have sent prices soaring in recent months.

The main US oil contract, West Texas Intermediate, dropped five percent to $76.32 a barrel, while the international benchmark Brent North Sea crude fell back below $80 a barrel.

Israel's aim in Rome talks with Lebanon is to "continue the positive momentum by establishing working groups on six issues," according to Israeli media.

The reports claim that working groups will be tasked with the maritime borders; the land borders; evaluating the "pilot zones" where the Lebanese army has replaced the Israeli army; disarming Hezbollah; stopping the flow of Iranian money into Lebanon; and stepping up reconstruction efforts in southern Lebanon.

Palestinians gathered on Tuesday for a mass funeral of more than 100 bodies finally recovered from a deadly Israeli strike in Gaza in 2023.

More than 300 people were killed on Nov. 22, 2023, weeks into Israel's genocidal war, when warplanes flattened a residential block in Gaza City’s Sabra neighborhood.

Around 40 bodies were recovered soon afterward in a frantic scramble of rough tools and bare hands, but most were buried deep beneath the rubble. The strike happened just before the first ceasefire, and reports of the high number of victims took days to reach the public in the chaos of the war.

Over the weekend, first responders dug through the destroyed buildings and recovered remains of 112 victims, including 40 children, according to the Civil Defense.

It said 157 bodies still have not been found.

Hamas on Tuesday called for clarifications from US President Donald Trump's Board of Peace, voicing "unease" over comments it made regarding the group's prospective disarmament and Israel's withdrawal in Gaza.

The Palestinian Islamist movement said on Friday that it had agreed to hand over its weapons, with the Board of Peace publishing a roadmap including provisions for the group's gradual disarmament and a "phased Israeli withdrawal" from Gaza.

But Israel had remained defiant against any pullout.

Following a meeting with Israeli Prime Minister Benjamin Netanyahu on Monday, the Board of Peace appeared to reassure Israel, saying that the withdrawal of the country's forces from its current positions in Gaza would only begin once Hamas completely disarmed.

A Hamas official said Tuesday that Hamas and other Palestinian factions "are uneasy with the statement issued by (Nickolay) Mladenov after his meeting with Netanyahu," referring to the high representative for Gaza under the Board of Peace.

"The statement focused solely on the issue of weapons and failed to address the occupation's obligations, particularly those related to humanitarian aspects and Israel's commitment to halting its aggression, including aerial and artillery bombardment, gunfire, assassinations and military operations in the Gaza Strip," the official told AFP on condition of anonymity.

Iran and Oman are reportedly close to agreeing a deal to end the five-month crisis in the Strait of Hormuz and re-open traffic through the vital shipping corridor.

In a report Monday, The New York Times provided Iran's account of the developing agreement, which if true would see Tehran effectively take control of the strait.

Optimism over a deal emerged over the weekend after US President Donald Trump abruptly backtracked on his threats to escalate the war. Both Trump and Iran's foreign ministry have claimed that a deal is close, though no-one has spoken on record about what it could involve.

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European stocks climbed alongside US futures on Tuesday, although a rebound in oil prices underscored market scepticism that the US-Israeli war on Iran would be resolved quickly through diplomacy.

Meanwhile the yen eased, but held on to most of its intervention-driven gains after last week's joint action by Tokyo and Washington to support the currency.

Qatar Foreign Ministry spokesperson Majed Al Ansari said diplomatic efforts to resolve the war were ongoing, but an attack near the Strait of Hormuz underscored doubts that the conflict was nearing an end.

Brent futures rose 1.5% to $85.05 a barrel after dropping 7% in the previous session to a three-week low.

Treasury Secretary Scott Bessent said that the United States could reach a deal with Iran to reopen the Strait of Hormuz by Wednesday, adding that this would stabilize energy prices.

"We are in talks with the Iranians, and I think there is a chance we may have a deal today or tomorrow to open the strait and move towards a more normalized position in this conflict," Bessent said Tuesday in an interview with CNBC.

Asked if a deal would allow Iran to charge a toll on shipping using the strait, Bessent said: "I think it would be freedom of movement."

With Netanyahu fighting for his survival ahead of Israel's October election, the political cost of withdrawing from Gaza may prove too high, writes Ansam Al-Kitaa.

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Mediator Qatar blamed Israel on Tuesday for delays in implementing a Gaza peace plan, after US President Donald Trump said militant group Hamas had agreed to disarm, as Israel refuses to leave the territory.

"It is clear to the international community who is obstructing the implementation of the agreement," Qatari foreign ministry spokesman Majed Al Ansari told reporters. "The full responsibility lies on the Israeli side."

An increase in Israeli strikes in Gaza over recent days is "nothing more than an attempt to derail the plan's implementation and block peaceful solutions", he added.

Mediating nation Qatar said on Tuesday efforts for a diplomatic solution between the United States and Iran were ongoing but that there were no direct talks between the sides planned.

"We can confirm that the efforts are still ongoing with all parties," foreign ministry spokesman Majed Al Ansari told reporters, adding that negotiations were focused on "a short-term resolution that would help us reignite the talks and go back to the mediation efforts in its totality".

A crew member went missing while two others fought a fire aboard a vessel struck by an "unknown projectile" in the Strait of Hormuz, a British maritime security company said on Wednesday.

The incident added to mounting concerns over the status of US-Iran talks to end the war and resume traffic in the key waterway, as US President Donald Trump insisted it could reopen within hours while Iran said no talks with Washington were underway.

Earlier, United Kingdom Maritime Trade Operations (UKMTO) said the vessel reported being "hit by an unknown projectile" and authorities were investigating, adding that the incident occurred 20 nautical miles (37 kilometres) northeast of Al Khasab, Oman.

British maritime security company Vanguard Tech identified the ship as the Liberia-flagged bulk carrier MINOAN PIONEER, hit while transiting northbound through the Strait of Hormuz at 2:00 am (2200 Monday GMT).

"The projectile reportedly struck the engine room, while a fire broke out in the accommodation area. The crew are fighting the fire and require assistance, while the third engineer is reported missing," Vanguard said.

"The initial distress call was relayed by the nearby Panama-flagged tanker SURIANAME PROSPERITY (IMO: 9376740), which reported that MINOAN PIONEER had suffered a complete blackout and required assistance," the company added.

Yemen's Houthis said they hit a Saudi target at the Najran Airport, the group said on Telegram. There was no confirmation from Saudi Arabia.

Iran wants control over inbound shipping through the Strait of Hormuz and visibility over outbound traffic, with the ability to intervene if necessary, under a plan being discussed with Oman to reopen the strategic waterway, a senior Iranian source told Reuters on Tuesday.

The source, who is involved in the talks, said this is "the general idea currently being discussed", and specified that the outbound lane would follow a route between Iran and Oman, with exit clearance granted through Oman after notifying Iran.

"Tehran is unlikely to change its position," the source added. 

Lebanon and Israel are set to begin a new round of US-sponsored direct talks in Rome on Tuesday, as Beirut seeks Israel's phased withdrawal from the country's south.

At negotiations in Washington in June, Israel and Lebanon agreed to a framework deal that involves the disarmament of Hezbollah, a withdrawal of Israeli forces from Lebanon's south and the deployment of the Lebanese army to the region, starting in test areas known as "pilot zones".

This week's negotiations, set to continue until Thursday, are the seventh round of US-sponsored talks since Israel's war on Lebanon, which has killed more than 4,300 people.

"There is no impediment to a public meeting between Hezbollah and the Syrian leadership at a time considered appropriate by both sides," Hezbollah chief Naim Qassem said Tuesday said in a televised address, emphasising "the importance and necessity of positive, fraternal, cooperative relations".

Hezbollah leader Naim Qassem said on Tuesday that direct negotiations between Lebanon and Israel would bring "nothing but shame, humiliation, and successive compromises" for Lebanon, ahead of new talks in Rome.

In a televised address, Qassem said Lebanon's President Joseph Aoun "has not acted as an arbiter, nor as a unifying figure, but has become biased and divisive, which is incompatible with his role and with Lebanon's strength".

From the Strait of Hormuz to the Red Sea, the Iran war is reshaping maritime security—and the Suez Canal may no longer be beyond its reach, writes Paul Iddon.

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According to Israeli media, Israel's Political-Security Cabinet will convene this evening to discuss the Gaza Strip deal and Trump's "Board of Peace," amid opposition from some ministers to the published 'roadmap' regarding Hamas disarmament.

Qatar, Egypt and Turkey, which are mediating the truce in Gaza, criticised Israel after renewed strikes in the Palestinian territory reportedly killed over 20 people on Monday.

The trio said they strongly condemned what they said were "ongoing Israeli violations in the Gaza Strip, particularly the targeting of health facilities and infrastructure, and the casualties among civilians, including women and children".

The situation was "a flagrant violation of international law and international humanitarian law", they added in a joint statement.

Iran defends its borders but does not seek an expansion of war, President Masoud Pezeshkian said on Tuesday according to state media.

While US President Donald Trump said on Monday that talks with Iran were underway, Tehran has denied that any negotiations were planned.

A British maritime monitoring agency said a cargo ship reported being hit by a projectile overnight off the coast of Oman in the Strait of Hormuz.

The cargo ship reported being “hit by an unknown projectile” at 2 a.m. local time while it was 37 kilometers (23 miles) northeast of Al Khasab in Oman, the United Kingdom Maritime Trade Operations Center said.

The UKMTO did not provide further information on the ship, including what flag the vessel was sailing under or whether it was carrying cargo.

The town of Al Khasab sits on the tip of the Arabian peninsula that juts into the Strait of Hormuz, the crucial waterway at the mouth of the Persian Gulf through which a fifth of the world’s oil and natural gas passed before the war.

Saudi Aramco on Tuesday said its net profit rose 44 percent in the second quarter year-on-year as the Middle East war pushed oil and gas prices higher.

Aramco, majority-owned by the state, reported net income of 122.6 billion Saudi riyals ($32.7 billion) from April to June, up from 85 billion riyals ($22.67 billion) in 2025.

Crude prices have been volatile throughout the war and were far higher in the second quarter of 2026 compared with a year earlier.

"Despite the unprecedented supply disruption through the Strait of Hormuz, we continued to demonstrate our ability to maintain business continuity," Aramco president and CEO Amin H. Nasser said in a statement.

He cited Aramco's "diverse asset base and multi-decade planning, including strategic infrastructure such as the East-West Pipeline, storage capacity, and export terminals".