US President Donald Trump said he would again extend the deadline for Iran to reopen the Strait of Hormuz or face the destruction of its energy plants, after Tehran had earlier rejected a 15-point US proposal to end the fighting as unfair.
The four-week war has spread across the Middle East, killing thousands of people and hitting the global economy with soaring energy prices, fuelling global inflation fears.
The United States and Israel launched strikes on Iran on February 28 during talks with Tehran about its nuclear program that had not yet yielded a deal.
On Thursday, Trump threatened during a cabinet meeting at the White House to increase pressure on Iran if it did not make a deal. He later posted on social media that he would pause threatened attacks on Iranian energy plants for 10 days until April 6 at 8 p.m. Eastern daylight time (0000 GMT on April 7).
"Talks are ongoing and, despite erroneous statements to the contrary by the Fake News Media, and others, they are going very well," he added in his Truth Social post.
Iran has said it is not engaged in talks with Washington and Trump has not identified who the U.S. is negotiating with in Iran, with many high-ranking officials killed in the war.
On March 23, Trump announced a halt to all threatened strikes against power plants and energy infrastructure for a five-day period, but has now extended it to 10 days.
Trump told Fox News' "The Five" program that the Iranians had asked for a seven-day pause on strikes on energy plants.
There was no immediate reaction from Tehran, but the Wall Street Journal cited peace talk mediators as saying Iran did not ask for a 10-day pause on such strikes.
Iran has said it would return strikes on energy facilities in the Gulf region if Trump follows through with his threat.
Iran has effectively blocked the Strait of Hormuz, which carries about 20% of global oil and liquefied natural gas, spiking energy prices and roiling financial markets.
The prospect of tit-for-tat strikes on civilian infrastructure could further rattle global markets and threaten the livelihoods of millions of civilians in the region who rely on electricity to power their cities and supply fresh water.
Iran says strikes hit residential areas
Iranian media reported strikes on residential areas in Tehran, Qom, Urumia in the early hours of Friday morning.
Three residential homes in the Pardisan area of Qom, south of Tehran, were struck, killing at least six people. In Tehran, rescue workers from the Red Crescent pulled a survivor from the rubble of a residential building that was hit by airstrikes.
A housing complex in the northwestern city of Urmia was struck by a direct missile attack, killing and injuring several civilians and destroying at least four residential units. Emergency responders were dispatched to the scene as rescue operations continue.
Israeli military said on Friday it struck ballistic missile production sites and air defence systems across Iran overnight, including targets in Tehran and western regions, in operations that the Israeli military says it is aimed at degrading Iran’s missile capabilities and reducing threats to Israel.
The war has massively disrupted shipping, sending crude oil prices up around 40%, seen liquefied natural gas prices spike, and prices for nitrogen-based fertilizers, critical to food production, rise around 50%.
Stock markets, having fallen sharply in the U.S. and Europe on Thursday, followed suit in Asia on Friday as investors worried about the conflict dragging on.
"Many see the Iranian regime as holding the upper hand and doubt that there are indeed productive negotiations with the U.S. in process," said ITC Markets senior FX analyst Sean Callow.
An Iranian official told Reuters that a 15-point U.S. proposal, conveyed to Tehran by Pakistan, was reviewed in detail on Wednesday by senior Iranian officials and the representative of Iran's supreme leader, who felt it served only U.S. and Israeli interests.
However, diplomacy had not ended, the official said.
The proposal included demands ranging from dismantling Iran's nuclear program to curbing its missiles and effectively handing over control of the Strait of Hormuz, according to sources and reports.
Despite Trump's upbeat assessment, Iran continued to retaliate against U.S. and Israeli strikes by hitting Israel and U.S. bases. It also struck Gulf states and effectively blocked Middle East fuel exports via the Strait of Hormuz, which carries about 20% of global oil and liquefied natural gas.
The United Arab Emirates has told the U.S. and other Western allies it would participate in a multinational maritime taskforce to reopen the strait, the Financial Times reported on Friday, citing people familiar with the matter.
Several U.S. allies have said they have no immediate plans to send ships to unblock the Strait of Hormuz, rebuffing a Trump request for military support to keep the vital waterway open.
Trump suggested on Thursday that Iran let 10 oil tankers transit the strait as a goodwill gesture in negotiations, including some Pakistan-flagged vessels.
The Pentagon was looking at sending up to 10,000 additional ground troops to the Middle East, the Wall Street Journal reported on Thursday, citing officials at the department.
The United States had deployed uncrewed drone speedboats for patrols as part of its operations against Iran, the Pentagon told Reuters, the first time Washington had confirmed using such vessels in an active conflict.
