US launches unprecedented 'economic D-day' on Iran

US President Donald Trump spoke last week to Pakistan's powerful army chief, who is visiting Tehran in a fresh attempt at mediation, a US source familiar with the matter told AFP on Monday.

The call between Trump and Asim Munir comes despite Trump saying last week that US talks with Iran were on hold for now, as the Iran war nears its six-month mark.

The source did not give further details of the call.

Pakistan said army chief Munir was leading a delegation traveling to Tehran on Monday as part of Islamabad's "ongoing efforts to help consolidate peace and security in the region."

Pakistan has played a key role in efforts to halt war between Iran and the United States, brokering a memorandum of understanding in June that subsequently broke down.

But the call with Trump also comes as Washington prepares to launch an "economic war" on Iran that would target Tehran's trading partners -- which include neighboring Pakistan.

Hossein Mohebbi, a spokesman for Iran's Islamic Revolutionary Guard Corps (IRGC), has warned of "heavy attacks on US energy chokepoints and vital interests" if Iranian infrastructure is targeted, according to state broadcaster IRIB.

"Any attack on Iran's infrastructure will bring heavy strikes on US energy chokepoints and vital interests," Mohebbi was quoted as saying.

He said US objectives, including reopening the Strait of Hormuz, had been thwarted, while Iran continued to produce weapons.

"Contrary to the enemy's perception that Iran's military had limited reserves, the production of our smart and guided missiles continues," he said.

Saudi Arabia's national shipping company Bahri confirmed in a statement on Monday that one of its vessels, the "Amzan", had been attacked in the Red Sea.

"All crew members are safe with no injuries reported," Bahri said in a statement on social media platform X.

A documentary examining Israel's killing of civilians in Gaza was added to the Venice Film Festival line-up on Monday, the second year running that a highly charged work about the conflict has competed for the prestigious Golden Lion.

Festival organisers said "NAZA", directed by the Israeli duo Yuval Abraham and Rachel Szor, will join the main programme for the September 2 to 12 event — the only documentary among this year's 21 contenders. Last year, "The Voice of Hind Rajab", which tells the harrowing story of the final hours of a Gazan girl murdered by Israeli forces, won second prize at Venice after earning a record 23-minute standing ovation at its premiere.

According to a synopsis released by the festival, "NAZA" was shot at night on the rooftops of Tel Aviv and "reveals in detail the systems behind Israel's calculated mass killing of Palestinian civilians in Gaza".

Israel said Monday that it had refused entry to two left-wing Swedish deputies in the European Parliament who wanted to visit the occupied West Bank.

Jonas Sjostedt and Hanna Gedin, members of Sweden's Left Party, were turned away Sunday at Israel's Ben Gurion Airport, the primary gateway for visitors to the Palestinian territory.

Israel's foreign ministry said the pair had "consistently acted against Israel", including by calling for international legal proceedings against Israelis.

"On various public occasions, they have spread false accusations against Israel, including allegations of genocide, deliberate starvation and the intentional targeting of children and medical personnel," the ministry said in a statement.

United Nations investigators, who do not speak for the global body as a whole, charged in June that Israel was deliberately targeting Palestinian children in an ongoing genocide of Gaza.

Pakistani Army Chief General Asim Munir arrived in Tehran on Monday, amid escalating tension between Iran and the United States and Washington’s proclaimed intention to launch a “maximum economic war” against Iran.

Iran in response has threatened to retaliate and target US economic interests in the region.

Munir’s visit comes as Omani Foreign Minister Badr al-Busaidi is scheduled to visit Tehran tomorrow, Tuesday, as part of efforts to establish a new shipping route through the Strait of Hormuz.

Read more:

President Donald Trump said Monday that Iran is "collapsing" hours before the US government was set to announce details of what it says will be crushing sanctions against Tehran.

"IRAN IS COMPLETELY COLLAPSING!!!" Trump posted in his trademark all-caps style on his social media platform Truth Social.

Planned new US sanctions on Iran and the UAE's halt on Tehran trade could severely disrupt Indian exports of rice, tea and pharmaceuticals to Iran, which have been largely routed through Dubai's port in recent years, Indian exporters said on Monday.

India has been among Iran's five largest trading partners, though bilateral trade has fallen by more than 90% from its 2018/19 highs of $17 billion, with exports now limited mostly to goods exempted on humanitarian grounds.

Indian exporters fear US President Donald Trump's proposed "economic D-Day" plan, likely to be unveiled later on Monday, could further squeeze trade weakened by sanctions, banking caution and shipping constraints.

The United Arab Emirates last week suspended all trade activities, exchanges and financial transactions with Iran until further notice.

"We are already seeing indications that transactions and payment mechanisms traditionally routed through the UAE are exploring alternative jurisdictions," said Dev Garg, vice president of the Indian Rice Exporters Federation, suggesting Turkey as an alternative.

The International Energy Agency is not discussing a second release of strategic oil reserves at this time, IEA chief Fatih Birol told Reuters on Monday.

The agency is always following the markets very, very closely, and 80% of strategic reserves remain after a 400 million-barrel release in March, Birol added.

The governor of Iran's Central Bank Abdolnaser Hemmati on Monday said the depreciation of the country's national currency was "temporary" as the Iranian Rial, already battered by war, plummeted further in value.

The currency has lost nearly 10 per cent of its value over the last two weeks, having already plunged early in the war, with the United States set on Monday to lay out its plans for "economic warfare" against Tehran.

"These increases (in prices of foreign exchanges) are temporary, meaning they fluctuate," Hemmati said, according to the video of his remarks aired on state TV.

He blamed "American political propaganda" for much of the economic pain affecting Iran, adding that he was sure "the situation will improve and the problems will be resolved."

Chinese President Xi Jinping told Jordan's King Abdullah that the Palestinians "are a core issue for the Middle East" in a meeting in Beijing, Chinese state radio says.

Xi called for a political solution, the resumption of peace talks between the Palestinians and Israel and for the swift "realisation of Palestine's… establishment as an independent state," according to an official summary of the meeting broadcast on state radio.

Nine-year-old Arkan Radi sat inside his family's tent in a displacement camp in Al-Zawayda in the central Gaza Strip, carefully making a small kite.

He cut the paper, attached thin wooden sticks, tied the string and chose colours resembling those of the Palestinian flag. He imagined it rising above the rows of tents as he and his friends ran after it.

For Arkan, it was supposed to be nothing more than a summer game and a brief escape from the tents, rubble and fear that have defined much of his childhood.

But when he finally stepped outside carrying the kite, his parents stopped him. At first, Arkan could not understand why.

"I made it to play with my friends," he told The New Arab. "I spent days working on it. I wanted to fly it and chase it after it, but my parents told me not to go out with it. I don't understand why they're afraid of it. It's just paper and string."

Read more below:

China's foreign ⁠ministry ⁠said it is closely watching developments and protect its rights as ⁠the US prepares to unveil new sanctions on Iran that are expected to hit Tehran's trading partners.

Foreign ministry spokesperson Lin ⁠Jian warned that sanctions ‌and pressure tactics do not help to resolve issues behind the US-Israeli war on Iran.

The US ‌Treasury Secretary, Scott Bessent  is set to hold a media conference at 18:00 GMT today after threatening last week to ⁠impose "the toughest sanctions ⁠in history" on Iran.

S&P 500 and Nasdaq futures slipped on Monday as investors prepared for a pivotal week marked by the prospect of fresh U.S. sanctions on Iran, Federal Reserve Chair Kevin Warsh's Jackson Hole speech and quarterly results by AI bellwether Nvidia.

The US is prepared to roll out economic sanctions targeting Iran's trade partners, in what it called "the greatest financial offensive ever", with Treasury Secretary Scott Bessent scheduled to hold a press conference in the US afternoon.

Still, oil prices fell over $1 a barrel as investors booked profits ahead of the announcement.

European shares were little changed on Monday as higher gold prices lent support, though uncertainty surrounding impending US.sanctions on Iran kept risk appetite in check.

The pan-European STOXX 600 was up 0.03% at 654.38 points, as of 0837 GMT.

Basic Resources rose 0.7% as gold prices climbed on a weaker dollar.

Travel and Leisure was the top-performing sector, rising 1% as lower oil prices boosted sentiment towards the energy-sensitive sector.

Energy shares were the worst-performing sector, falling 0.6%, tracking Brent crude prices, which were at around $93 a barrel.

Iran's foreign ministry said on Monday that France's decision to expel two Iranian diplomats in response to Tehran's ban on two French diplomats was "illegal".

"The action that France took is an illegal action in response to Iran's legal action, and is in no way helpful to bilateral relations," ministry spokesman Esmaeil Baqaei said at a weekly press conference.

Last week, Baqaei said two French diplomats who were briefly arrested in Iran in July over "interference" in Iran's internal affairs "would not be permitted to return".

French Foreign Minister Jean-Noel Barrot responded by saying that two Iranian diplomats in France would be expelled "in the coming days".

Barrot said the French move was a consequence of "intolerable" treatment of the French diplomats, who were briefly detained last month in Tehran.

He said the pair had been targeted by Iranian officials "in flagrant violation of diplomatic immunity".

They had also suffered "an extremely serious act of intimidation" at the hands of Iran's security service, he added.

Baqaei had previously said Paris should apologise for the actions of the French diplomats, which he said had violated the Vienna Convention.

Pakistan's army chief Asim Munir spoke with US President Donald Trump last week, according to three Pakistani sources, days before Munir was expected to hold talks in the Iranian capital of Tehran on Monday.

The call, which has not been previously reported, came as the US threatened to roll out major economic sanctions targeting Iran and its trade partners.

The White House Office of the Press Secretary did not immediately respond to a request for comment. It was unclear what Munir and Trump discussed.

Iran's rial currency hits a new record low of 2 million to the US dollar as morning trading began.

A tanker was struck by an unknown projectile 63 nautical miles west of Saudi Arabia's port city of Yanbu, leading to a fire on the vessel's main deck, the United Kingdom ​Maritime Trade Operations said on Monday.

The UKMTO said all crew were safe and accounted for with no reported environmental impact.

Trump's threats against Oman put his contempt for allies on full display, and slaps one of Washington's long-standing diplomatic partnerships in the face, writes Crystal A. Ennis.

Read more below:

Iran has issued a warning that vessels violating its arrangements for transiting the Strait of Hormuz could face restrictions including fines, detention or confiscation, the Persian Gulf Strait Authority wrote in a post on X.

The PGSA, a new body Iran has established with the aim of managing the strait, has said cargo owners should refer to an updated list of vessels deemed non-compliant for voyages relating to the Gulf. 

Seven protesters who blocked traffic on the Golden Gate Bridge in a 2024 pro-Palestinian protest against Israel’s assault on Gaza have been sentenced to 30 days, with credit for time already served.

They were convicted in July of misdemeanor charges by a San Francisco jury that remained deadlocked on the more serious charge of felony conspiracy.

Defense attorneys said demonstrators acted out of a moral responsibility to oppose the genocide by Israeli of Gaza and Washington’s support for it.

San Francisco District Attorney Brooke Jenkins said the protest caused a safety risk for those stuck in traffic and there should be consequences when laws are broken.

“Throughout history, civil disobedience has mostly involved accepting legal consequences,” Superior Court Judge Teresa Caffese is quoted as saying by local station KQED. “In that spirit, those who blocked the bridge and disrupted the lives of hundreds of commuters should be treated respectfully, but should also be prepared to accept the consequences of their actions.”

The sentences included half the time in county jail while the remaining days can be served at a work release program operated by the San Francisco Sheriff’s Office. There will be four days’ credit for previous time already served. The sentencing also included six months of probation, and fines and restitution of over $1,000.

The defendants will remain free while the case is appealed, SFGate reports.

The jury convicted the seven protesters on misdemeanor counts including false imprisonment, obstruction of thoroughfare, unlawful assembly and in one defendant’s case refusal to disperse.

The United States cancelled a joint amphibious landing drill scheduled for next month with South Korea, Seoul's Marine Corps said on Monday, after Washington cited constraints on the availability of US forces due to the war in Iran.

The US Marine Corps formally notified its South Korean counterpart in June that force availability would be constrained for the division-level exercise, known as Ssangyong, a South Korean Marine Corps spokesperson told a press briefing.

The allies remain in close consultations on resuming the drills, the spokesperson said. He did not specify what measures might be taken to prevent future cancellations or to make up for lost training opportunities.

US Forces Korea did not immediately respond to a request for comment.

Oman's Foreign Minister Sayyid Badr Albusaidi will visit Tehran on Tuesday to continue talks between Iran and Oman on the Strait of Hormuz, Iran's Foreign Ministry Spokesperson Esmaeil Baghaei said on Monday.

On Sunday, Baghaei said the army chief of Pakistan, which has mediated between the United States and Iran, will visit Tehran on Monday.

Oil prices fell on Monday as investors braced for details of a US plan to isolate the Iranian economy that President Donald Trump billed as the "most crushing" financial operation ever against Tehran.

Eyes are on US Treasury boss Scott Bessent, who said he would give more details in a news conference on Monday on a fresh push to pile economic pressure on Iran.

The United States warned allies and China on Thursday to join Trump's new campaign, which comes as the unpopular US-Israeli war on Iran drags toward the six-month mark.

US Vice President JD Vance admitted the plan was a "delicate dance" because Iran will "try to apply economic pressure to us".

Asked whether the United States would pressure China, Bessent told CNBC that "many conversations are best to have in private", but called on Beijing "to get with the programme".

Both main crude contracts were down 2.3 percent, with the Brent benchmark sitting at $92 a barrel.