United States President Donald Trump says he has decided to pause an attack on Iran at the behest of Gulf leaders after Tehran sent a new peace proposal to Washington through Pakistan.
On Monday, Trump said there is now a “very good chance” the US could reach an agreement with Iran to prevent Tehran from obtaining a nuclear weapon.
An initial, temporary ceasefire commenced on April 8, six weeks into the war. Since then, armed hostilities have largely subsided, but a durable peace agreement remains elusive, with both the US and Iran dissatisfied with each other’s proposed terms.
Also on Monday, Saudi Arabia said it had intercepted three drones, one day after a drone attack hit the Barakah Nuclear Energy Plant in the United Arab Emirates. This has raised more concerns about the potential for renewed military escalation in the Gulf as peace negotiations drag on.
What has Trump said about a new attack on Iran?
Following the reported drone attacks on the UAE and Saudi Arabia on Sunday and Monday, Trump wrote in a Truth Social post: “For Iran, the Clock is Ticking, and they better get moving, FAST, or there won’t be anything left of them. TIME IS OF THE ESSENCE!”
Then, later on Monday, Trump wrote another post, saying he had been asked by the leaders of Qatar, Saudi Arabia and the UAE to hold off on a planned attack on Iran scheduled for Tuesday since “serious negotiations are now taking place.”
He added that he had instructed Secretary of Defense Pete Hegseth, Chairman of The Joint Chiefs of Staff General Dan Caine and the US military not to carry out the scheduled attack. However, he said, he “further instructed them to be prepared to go forward with a full, large scale assault of Iran, on a moment’s notice, in the event that an acceptable Deal is not reached”.
What do we know about the latest peace plan Iran has submitted?
Iran has submitted a revised 14-point peace plan to end the war, the semi-official Tasnim news agency reported on Monday.
Iranian Ministry of Foreign Affairs spokesman Esmaeil Baghaei told a news briefing on Monday that Tehran’s response to the previous US proposal had been “conveyed to the American side through mediator Pakistan”, according to Tasnim.
Washington and Tehran have exchanged multiple proposals in recent weeks amid a ceasefire that has mostly halted six weeks of fighting. However, the initial direct talks mediated by Pakistan in Islamabad in April stalled, and Trump said last week the ceasefire is “on life support”.
While the specific proposals in the latest plan from Iran have not been made public, Baghaei said demands include the release of its assets frozen abroad and the lifting of sanctions.
“The points raised are Iranian demands that have been firmly defended by the Iranian negotiating team in every round of negotiations,” he said.
Iran has also previously demanded compensation for damage inflicted by US-Israeli attacks, an end to the ongoing US naval blockade of Iranian ports and a halt to fighting on all fronts, including in Lebanon, where Israeli forces continue daily attacks and have mounted a ground invasion in the south of the country.
Washington has urged Tehran to dismantle its nuclear programme and lift a blockade on the Strait of Hormuz, which, before the war, carried one-fifth of the world’s crude oil and liquefied natural gas (LNG) supply.
What are the main sticking points between Iran and the US?
A major point of contention is Iran’s stockpile of enriched uranium. During negotiations, Washington has urged Tehran to give away its enriched uranium, a demand Tehran has resisted.
Iran is believed to have about 440kg (970lb) of uranium enriched to 60 percent. A 90 percent threshold of enriched uranium is needed to produce a nuclear weapon. Iran has never officially declared an intention to build nuclear weapons. The US wants this stock to be handed over to it, but Iran is reportedly only willing to consider handing it to a third party – if at all.
Iran’s Foreign Minister Abbas Araghchi told reporters on the sidelines of a meeting of foreign ministers from BRICS nations in New Delhi last week that Iran and the US have reached a “deadlock” on the question of Iran’s “enriched material”.
As a result, he said, the topic is being “postponed” until later stages in the talks. “For the time being, it is not under discussion, it’s not under negotiation, but we will come to that subject in later stages.”
Araghchi confirmed he had spoken to Russian officials about an offer from Moscow to store Iran’s enriched uranium. He said Iran may consider Russia’s proposal at an “appropriate time” and that he appreciates Moscow’s efforts.
“When we come to that stage, obviously we will have more consultations with Russia and see if the Russian offer can help or not,” he said.
The US and Iran are also arguing about whether Iran should be allowed to enrich uranium at all. Under the Obama-era Joint Comprehensive Plan of Action, signed with several countries in 2015, Iran was able to continue enriching to 3.87 percent – enough for the development of a nuclear power programme. Trump withdrew the US from that agreement in 2018, despite consistent reports from the International Atomic Energy Agency (IAEA) that Iran had stuck to its terms. Now, the US wants a moratorium on all uranium enrichment for a period of up to 20 years, it says.
Another sticking point between the two countries is the Strait of Hormuz in the Gulf.
Since early March, Iran has restricted shipping through the strait, a narrow waterway linking Gulf oil producers to the open ocean and through which 20 percent of the world’s oil and liquefied natural gas (LNG) supplies are shipped during peacetime. Iran has allowed passage by vessels from select countries, but they are required to negotiate transit with the Islamic Revolutionary Guard Corps (IRGC).
In its previous proposals to end the war, Iran has mentioned charging fees or tolls for vessels seeking to pass through the state. Washington has repeatedly rejected the prospect. In April, the US announced a naval blockade on ships entering or leaving Iranian ports, further adding to the disruption of global oil and gas supplies.
Iran’s state media reported, citing the Iranian Ministry of Foreign Affairs, that technical teams from Iran and Oman met in Oman to negotiate a mechanism for safe transit in the Strait of Hormuz.
A third likely major point of friction – although one which may also be kicked into later discussions – is Iran’s support for a network of “proxy” armed groups around the Middle East which it calls its “axis of resistance”. These include the Houthis in Yemen, who have also caused disruption by launching attacks on Israel-linked ships in the Red Sea in the past, Hezbollah in Lebanon and multiple groups based in Iraq and Syria.
Weekly insights and analysis on the latest developments in military technology, strategy, and foreign policy.
President Donald Trump on Monday alluded to the U.S. sending troops into Iran to retrieve its highly enriched uranium (HEU). His comments follow similar words on the same topic from Israeli Prime Minister Benjamin Netanyahu made to 60 Minutes on Sunday. Taken in aggregate, the statements suggest that there is coordinated messaging on the issue between Washington and Jerusalem and, after stalled talks with Iran, the possibility of such an operation may have been elevated.
As we stated shortly after the war kicked off, a mission into Iran to rid the country of its highly enriched nuclear material, once and for all, would be extremely risky and very complex. You can read more about these realities here. The main issue is that, by the Trump administration’s own stated objectives, the current conflict doesn’t really end until the enriched uranium, most of which is likely buried in the rubble of the underground Isfahan nuclear complex, is removed from the country. Estimates state that this stockpile, stored in scuba tank-like cylinders, is likely enough material to construct around a dozen nuclear warheads, that is if a program to fully weaponize it and construct and validate a device were to move forward.
Speaking to reporters on Monday, Trump said Iran initially offered to accompany the U.S. into its facilities storing HEU that were severely damaged during last year’s Operation Midnight Hammer attacks.
However, Tehran changed its stance, Trump claimed.
“They said ‘you’re going to have to take it,’” the American president said of Iran’s initial response to the issue of recovering the uranium.
“We were going to go with them, but they changed their mind because they didn’t put it in the paper,” the president added, referring to a peace plan delivered by Iran over the weekend. “So they agree with us, and then they take it back…But I have a great plan, but the plan is they cannot have a nuclear weapon. And they didn’t say that in their letter.”
NOW – Trump claims Iran rescinded a previous offer inviting the U.S. to come in and remove all enriched uranium from the country: “They said you’re going to have to take it. We were going to go with them. But they changed their mind.” pic.twitter.com/QcaqpNsXQu
Trump also played-off the issue this weekend saying U.S. forces are watching the site closely and will kill anyone or anything that gets close to it.
‼️ Trump on the enriched Uranium : We’ll get that at some point… We have it surveilled. I did a thing called Space Force, and they are watching that… If anybody got near the place, we will know about it — and we’ll blow them up. pic.twitter.com/pvcZ6vRqJQ
Speaking to 60 Minutes, Netanyahu seemed more direct about a potential ground incursion into Iran, yet evasive about the details. Asked how he envisions the highly enriched uranium will be removed from Iran, Netanyahu stated: “You go in, and you take it out.”
“With what? Special forces from Israel, special forces from the United States?” the Israeli leader was quizzed.
“Well, I’m not gonna talk about military means, but what President Trump has said to me, ‘I want to go in there.’ And I think it can be done physically. That’s not the problem. If you have an agreement, and you go in, and you take it out, why not? That’s the best way.”
Netanyahu was purposefully elusive when asked if it would require force to remove the uranium should no agreement be reached.
“Well, you’re gonna ask me these questions. I’m gonna dodge them. Because I’m not gonna talk about our military – possibilities, plans, or anything of the kind,” he proffered. “I’m not gonna give a timetable to it, but I’m gonna say that’s a terrifically important mission.”
Netanyahu says there’s still “work to be done” before Iran war ends | 60 Minutes
The Israeli government “wants Trump to order a special forces operation to secure Iran’s enriched uranium stockpile,” Axios reported on Monday. “Israeli officials say Trump is hesitant to order such an operation because it is highly risky.”
Axios: The Israeli government wants Trump to order a special forces operation to secure Iran’s enriched uranium stockpile. Israeli officials say Trump is hesitant to order such an operation because it is highly risky.
As we have previously reported, Trump is mulling over his options to retrieve the HEU through a special operations mission. Former U.S. Central Command commander, retired Gen. Joseph Votel, also told us at the time that such an endeavor is highly risky and may not achieve its goal. You can read more about his analysis in our interview with him here.
Meanwhile, ending the hostilities remains in question as the U.S. and Iran remain far apart in ceasefire negotiations. Trump on Monday called the aforementioned recent Iranian peace offer a “piece of garbage” that he didn’t finish reading and added that the ceasefire is on “massive life support.”
Trump is “leaning toward taking some form of military action against Iran to increase pressure on the regime and force concessions on its nuclear program,” Axios reported, citing two U.S. officials.
“He will tune them up a bit,” one U.S. official told the outlet. “I think we all know where this is going,” a second U.S. official said.
Regardless, two U.S. officials told Axios they don’t think Trump would order military action against Iran before he returns from China.
President Donald Trump is likely to press President Xi Jinping over China’s approach to Iran when they meet later this week, senior US officials said Sunday. https://t.co/mxmwLrCs1w
Trump is considering Project Freedom, the effort to guide commercial shipping through the Strait of Hormuz that he paused after about 36 hours last week, Axios added. He is also weighing whether to “resume the bombing campaign and strike the 25% of targets the U.S. military identified but hasn’t hit yet.”
הנשיא טראמפ נפגש היום (שני) עם צוות הביטחון הלאומי הבכיר שלו כדי לדון בצעדים הבאים מול איראן, כולל אפשרות לחידוש הלחימה, לאחר שהמשא ומתן בין הצדדים הגיע למבוי סתום ביום ראשון, כך אמרו שלושה בכירים אמריקנים https://t.co/Yolz48Dxqj
Trump told Fox News that he is thinking about reconstituting Project Freedom.
“President Trump just spoke to our John Roberts a moment ago,” the network noted. “He says he is now considering renewing Project Freedom, but he says this time around the US guiding ships through the Strait of Hormuz would be just one small piece of a larger military operation.”
“He would not divulge at this time what the other pieces would be,” Roberts explained.
As we previously explained, Trump initially claimed he paused Project Freedom to give Iranian negotiators more time to respond to his peace deal. However, NBC News later reported that Trump ended the effort because Saudi officials, surprised by the operation, withdrew access to its bases and airspace.
President Trump told Fox News he is considering reviving Project Freedom, adding that U.S. naval escorts through the Strait of Hormuz would be only one component of a broader military operation. pic.twitter.com/RgLfVVRomi
Iran on Monday revealed what it claimed to be its terms, which made no mention of the uranium. They include the U.S. paying war damages to Iran, recognition of Iran’s sovereignty over the Strait of Hormuz, the end of U.S. sanctions and the release of Iran’s blocked assets by the U.S., according to a post on X by Iran’s official IRIB state broadcaster.
🚨EXCLUSIVE Details of Iran’s response to the U.S plan, which Trump called unacceptable:
– The necessity for the U.S. to pay war damages to Iran. – Recognition of Iran’s sovereignty over the Strait of Hormuz. – End of U.S. sanctions. -Release of Iran’s blocked assets by the U.S.
— IRIB (Islamic Republic of Iran Broadcasting) (@iribnews_irib) May 10, 2026
Speaking at a press conference on Monday, Iranian Foreign Ministry spokesman Esmail Baghaei described his government’s offer as reasonable.
“Is it excessive to demand an end to maritime piracy against Iranian ships?” he asked rhetorically. “To demand the release of Iranian assets unjustly held in foreign banks for years under American pressure? Our proposal for safe passage through the Strait of Hormuz, is that excessive? Establishing security and peace across the entire region, including Lebanon, is that excessive?” “Unfortunately, the American side still insists on positions largely built and shaped by the Zionist regime, and continues to hold its one-sided stance and unreasonable demands,” Baghaei added.
Iran’s FM Spokesperson Esmail Baghaei:
We did not demand any concessions from America; rather, we called for an end to the war and a halt to the piracy at sea against Iranian ships.
In his comments, the Iranian official was referring to the U.S. firing on and seizing Iranian-linked ships. Baghaei was also reacting to a statement made by Trump on Sunday dismissing Tehran’s latest offer. Trump has repeatedly stated his main objectives are that Iran will never get a nuclear weapon and that the Strait of Hormuz will be reopened. The future of Iran’s ballistic missile arsenal and support for proxies like the Houthis and Hezbollah are other sticking points.
“I have just read the response from Iran’s so-called ‘Representatives,’” Trump announced on his Truth Social platform. “I don’t like it — TOTALLY UNACCEPTABLE!”
“I have just read the response from Iran’s so-called ‘Representatives.’ I don’t like it — TOTALLY UNACCEPTABLE! Thank you for your attention to this matter.” -President DONALD J. TRUMP pic.twitter.com/MIQDS9Ujjy
Given the wide diplomatic gap between the U.S. and Iran and statements by Trump and Netanyahu, how much longer the ceasefire can hold remains an open question.
UPDATE: 7:44 PM EDT –
Reacting to the aforementioned Wall Street Journal story about a clandestine Israeli military base set up in Iraq, that country’s military on Monday said there are currently no foreign military bases or forces operating in the country.
The Iraqi Security Media cell stated on X that “the matter pertains to an incident that occurred on 5/3/2026, during which an Iraqi security force from the Karbala Operations Command, as well as from Najaf, moved and clashed with unidentified, unlicensed detachments supported by aircraft at that time, resulting in the martyrdom of one fighter from the Iraqi security forces, the injury of two others with wounds, and the damaging of a vehicle.”
“We wish to clarify that some are attempting to exploit this incident politically, and there are escalatory statements being made without knowledge of the facts,” the post continued. “All these statements harm the reputation of Iraq and its security leadership, which affirms—and is certain—that there are no unauthorized forces or bases currently on Iraqi territory. There is significant effort being undertaken by our security units through inspection operations across all areas of responsibility. We also affirm that the necessary legal measures will be taken against anyone attempting to spread misleading information or malicious rumors that send negative messages about Iraq’s sovereignty, prestige, and the sacrifices of its security institutions.”
بيان •••• نتابع باهتمام كبير ما يتم تداوله من تصريحات وأخبار بشأن وجود قواعد وقوات غير مصرح بها على الأراضي العراقية، وتحديداً في صحراء كربلاء شرق النخيب والنجف. وسبق أن أكدنا أن الأمر يتعلق بحادثة وقعت بتاريخ 5/3/2026، حيث تحركت قوة أمنية عراقية من قيادة عمليات كربلاء…
— خلية الإعلام الأمني🇮🇶 (@SecMedCell) May 11, 2026
UPDATE: 6:36 PM EDT –
Israel’s Iron Dome air defense system “has been nearly 99% effective against missiles from Hamas and Hezbollah militants and has knocked out most missiles from Iran,” the chairman of state-owned Iron Dome maker Rafael Advanced Defense Systems Ltd said on Monday, according to Reuters.
Rafael’s Yuval Steinitz told a conference of the Jerusalem Center for Security and Foreign Affairs that since the October 2023 Hamas raid on Israel, Hamas in Gaza and Hezbollah in Lebanon have between them fired some 40,000 rockets at Israel.
“Iron Dome intercepted most of them with success rates that (are) not 100% but close to 100%. It’s around 98%, even 99%, so it’s not perfect, but almost,” Steinitz said.
Iran, he added, has fired about 1,500 ballistic missiles at Israel in two rounds of fighting since 2024 and “only several dozens” were not intercepted.
He noted that there was no shortage of missile interceptors.
The Trump administration is keeping up its economic pressure on Iran, “sanctioning another network selling and shipping Iranian oil for the IRGC,” State Department spokesman Tommy Piggott stated X. “This action marks an additional round of sanctions under Economic Fury, part of the Administration’s maximum pressure campaign.”
The Trump Administration is sanctioning another network selling and shipping Iranian oil for the IRGC. This action marks an additional round of sanctions under Economic Fury, part of the Administration’s maximum pressure campaign.
Satellite imagery from @CopernicusEU shows no supertanker loadings on May 8, May 9 and May 11 (we don’t have data for May 10 from either Sentinel 1 or Sentinel-2 ),” Bloomberg energy and commodities columnist Javier Blas noted on X. “It looks like the longest stretch without loadings since the early days of the war.”
Kharg Island update: @CopernicusEU satellite imagery shows no supertanker loadings on May 8, May 9 and May 11 (we don’t have data for May 10 from either Sentinel 1 or Sentinel-2 🛰️). It looks like the longest stretch without loadings since the early days of the war. pic.twitter.com/yJoTzGO79j
As Pakistan positioned itself as a diplomatic conduit between Tehran and Washington, “it quietly allowed Iranian military aircraft to park on its airfields, potentially shielding them from American airstrikes,” CBS News reported, citing U.S. officials with knowledge of the matter.
Iran also sent civilian aircraft to park in neighboring Afghanistan, the network added, saying it was not clear if military aircraft were among those flights.
Among the military hardware was an Iranian Air Force RC-130, a reconnaissance and intelligence-gathering variant of the Lockheed C-130 Hercules tactical transport aircraft.
Scoop via @CBSNews: As Pakistan positioned itself as a diplomatic conduit between Tehran and Washington, it quietly allowed Iranian military aircraft to park in its country, potentially shielding them from US airstrikes, sources told @JimLaPorta and me. Days after Trump announced…
The strikes, which the UAE has not publicly acknowledged, included an attack on a refinery on Iran’s Lavan Island in the Persian Gulf, WSJ said, adding that the attack took place in early April, according to the publication.
The UAE has carried out military strikes on #Iran, according to the Wall Street Journal.
The strikes, which the UAE has not publicly acknowledged, included an attack on a refinery on Iran’s Lavan Island in the Persian Gulf.https://t.co/0GJFrUdbsh
The U.S. blockade on Iranian ports remains ongoing, there was another report of ships attacked by drones in the Persian Gulf and the UAE said Iran is continuing to launch attacks against its territory.
U.S. Central Command on Monday claimed it has turned away 62 ships and disabled four attempting to run the blockade in total since the blockade began on April 13.
USS Delbert D. Black (DDG 119) monitors regional waters as it transits the Arabian Sea during enforcement of the U.S. blockade against Iran. CENTCOM forces have redirected 62 commercial ships and disabled 4 to ensure compliance. pic.twitter.com/Qw5QrTUn5R
The Ambrey maritime security firm said two ships were struck on Sunday in the Persian Gulf.
“A Panama-flagged deck cargo vessel was impacted by an unmanned aerial vehicle (UAV) while anchored approximately 23.6 NM east-northeast of the port of Doha, Qatar,” according to an Ambrey alert. “The impact resulted in a small fire, which was subsequently extinguished by the vessel’s crew. The vessel reported damage to its conveyor system at approximately 07:15 UTC. One coast guard vessel was observed alongside, rendering assistance. No crew casualties were reported in connection with the incident. This incident occurred approximately 2.8 NM south of an additional vessel that was impacted by a projectile on the morning of 10 May. Ambrey will provide updates as new information becomes available.”
The Ambrey alert did not specify who launched the drones.
On Sunday, UAE said it was attacked by two drones launched by Iran, the latest in a string of strikes dating back to the beginning of the war on Feb. 28 and continuing even after the April 7 ceasefire between the U.S. and Iran.
UAE Air Defenses engaged 2 UAV’s.
The Ministry of Defense announced that on May 10, 2026, UAE air defense systems successfully engaged 2 UAV’s launched from Iran.
Since the onset of these blatant Iranian attacks, UAE air defenses have engaged a total of 551 ballistic missiles,… pic.twitter.com/yvruj6d3om
Last week, the U.S. imposed sanctions on several China-based companies, alleging that they provided “satellite imagery to enable Iran’s military strikes against US forces in the Middle East” and enabled “efforts by Iran’s military to secure weapons, as well as raw materials with applications in Iran’s ballistic missile and unmanned aerial vehicle (UAV) programs,” according to the Guardian.
On Monday, China lashed out at those sanctions, describing them as illegal and unilateral, Reuters reported.
“We have always required Chinese enterprises to conduct business in accordance with laws and regulations, and will firmly safeguard the legitimate rights and interests of Chinese enterprises,” spokesperson Guo Jiakun said at a regular press briefing.
Iraqi lawmakers are calling for investigation into a clandestine military outpost Israel reportedly set up in the Iraqi desert to support its air campaign against Iran. The Wall Street Journal on Saturday reported that Israel built the installation, which housed special forces and served as a logistical hub for the Israeli air force, with the knowledge of the U.S. just before the start of the war. It also included search-and-rescue teams positioned to assist any downed Israeli pilots, according to the Journal. Israeli forces fired on Iraqi troops after it was discovered, the newspaper added.
Exclusive: Israel built a secret military post in Iraq to support its campaign against Iran and launched strikes on Iraqi troops who almost found it early in the war https://t.co/f9FISMgdNs
Ahmed Majid, a Kurdish politician, “is among several lawmakers who have harshly reacted to the report of the existence of an Israeli base in the Arab country,” Iran’s official IRNA news agency reported on Monday. Majid warned “that Iraq’s sovereignty is being violated by both the United States and the Israeli regime.”
Member of Parliament Abu Turab al-Tamimi called the presence of the Israeli military base and American forces “a dangerous security scandal” and raised questions “about how enemy forces entered deep into Iraqi territory without the knowledge of border guards, the Interior Ministry, and the Joint Operations Command.”
al-Tamimi insisted that “an immediate investigation should be opened and committees should be formed to hold the perpetrators accountable,” IRNA noted.
Video emerged online purporting to show the Israeli outpost, in the Najaf desert, from a distance. The video was reportedly taken by an Iraqi soldier, though we cannot independently verify these claims.
Circulating footage claiming to show the Israeli military outpost in Iraq’s Najaf desert from a distance. The Iraqi soldier who is filming says the lights belong to two U.S. bases. The Iraqi forces appear to be keeping their distance, as reported by Al-Arabiya. https://t.co/p7tGGCyEDOpic.twitter.com/kgAfEtsGgI
— Ariel Oseran أريئل أوسيران (@ariel_oseran) May 10, 2026
However, the likelihood of an outpost like this is something we have suggested was all but assumed going back to last year’s 12 Day War.
Hezbollah released video footage on Sunday claiming to show its first-person view (FPV) drones attacking an Israeli Iron Dome air defense battery in northern Israel. The video shows what appears to be two attacks, one on a launcher and one on another launcher with several Israeli troops observed nearby. In each case, the video cuts out before any damage is seen.
“There was no public comment from the IDF, but unofficially, IDF sources could not dispute the video’s authenticity, and the visuals spoke for themselves,” the Times of Israel noted.
Hezbollah released footage showing one of its drones targeting an iron dome platform positioned in Israel northern border over the weekend. pic.twitter.com/aWBr7NiLkw
— Ariel Oseran أريئل أوسيران (@ariel_oseran) May 10, 2026
The British Royal Navy is deploying its Type 45 destroyer HMS Dragonto the Middle East to take part in a potential European post-ceasefire effort to secure the Strait of Hormuz. The vital body of water has been closed to nearly all shipping by Iran since the war broke out on Feb. 28.
The deployment comes as the U.K. and France will host the first meeting of the Strait of Hormuz coalition of defense ministers on Tuesday to map out a way forward amid the global economic impact of the Strait closure. It is also taking place as the latest round of negotiations between the U.S. and Iran remains deadlocked while a shaky ceasefire holds.
“The Type 45 destroyer will forward deploy to ensure the UK can contribute to a future multinational mission to secure the critical waterway and safeguard freedom of navigation, following a sustainable ceasefire,” the Royal Navy said in a statement on Monday. “HMS Dragon can use her Sea Viper missile system to help safeguard UK assets and interests – assisted by Wildcats from 815 Naval Air Squadron equipped with Martlet missiles able to deal with the aerial drone threat.”
The Wildcats are helicopters with drone-busting capabilities that operate off Royal Navy destroyers and frigates.
The idea is that the Dragon would help set up an air defense bubble over the Strait in case a more comprehensive ceasefire breaks down. That would protect ships like the German minesweeper Fulda, which is also heading toward the region, as well as commercial vessels transiting the Strait.
As we previously reported, the Royal Navy’s Type 45 destroyer HMS Diamond used the Sea Viper system, along with guns, to take down more than a half-dozen drones launched by the Houthis in one engagement during the Iranian-backed rebel group’s campaign against Red Sea shipping in 2024.
You can see an image from that engagement below.
Royal Navy personnel aboard the HMS Diamond in action against a Houthi attack in the Red Sea. (Owen Cooban/U.K. Ministry of Defense) Owen Cooban/U.K. Ministry of Defense
The Portsmouth-based Dragon left the UK in March and has been “helping to safeguard the island of Cyprus in the Eastern Mediterranean,” according to the Royal Navy. In our earlier reporting, we noted that the French aircraft carrier Charles de Gaulle entered the Red Sea last week.
News about the deployment of French and U.K. vessels to the Middle East sparked a sharp warning from Iran.
“Any deployment and stationing of extra-regional destroyers around the Strait of Hormuz, under the pretext of ‘protecting shipping,’ is nothing but an escalation of the crisis, the militarization of a vital waterway, and an attempt to cover up the true root of insecurity in the region,” Iran’s Deputy Foreign Minister Kazem Gharibabadi stated on X. “Accordingly, it is emphasized that the presence of French and British warships, or those of any other country potentially accompanying the illegal and internationally unlawful actions of the United States in the Strait of Hormuz, will be met with a decisive and immediate response from the armed forces of the Islamic Republic of Iran. Therefore, they are strongly advised not to complicate the situation further.”
Gharibabadi did not elaborate on what that response might be.
فرانسه اعلام کرده است ناو هواپیمابر «شارل دوگل» را برای آماده سازی یک ماموریت آینده همکاریهای مشترک میان پاریس و لندن با هدف تقویت آزادی کشتیرانی در منطقه تنگه هرمز، به سمت دریای سرخ و خلیج عدن فرستاده است. در همین حال، دولت انگلیس هم اعلام کرده که در همراهی با فرانسه، یکی از…
Tomorrow U.K. Defense Secretary John Healey MP will co-chair a meeting of over 40 nations, alongside his French counterpart, Minister Catherine Vautrin, for the multinational mission’s first Defense Ministers’ meeting.
“The plan is strictly defensive and, once conditions allow, will focus on restoring confidence for commercial shipping along the critical trade route,” the Royal Navy noted. “HMS Dragon could play a key role in this mission. The ship’s forward presence will help strengthen confidence among commercial shipping firms, support mine-clearance efforts, and protect vessels once hostilities have ceased.”
SACRAMENTO — One of Gavin Newsom’s top goals as he winds down his final year as California governor is to leave the state with a balanced budget.
After years of the state spending more money than it brings in, it’s Newsom’s last opportunity to fix a chronic deficit or dump the problem on the next governor.
How far he goes to solve the state’s structural spending imbalance will define his legacy as a steward of trillions in taxpayer dollars. As a potential candidate for president in 2028, he could also have a political incentive to do as little as possible.
“Any cuts you make are going to cause people to scream,” said Darry Sragow, a veteran Democratic strategist. “Any increases in taxes are going to cause people to scream and in terms of what’s best for a presidential run, it would be nice if people weren’t screaming.”
As California’s 40th governor, Newsom expanded publicly funded healthcare to income-eligible undocumented immigrants, increased state-subsidized child-care slots and provided free meals for schoolchildren among a wishlist of progressive wins since he took office in 2019.
His achievements have helped struggling Californians live in an increasingly unaffordable state and given him bona fides to tout to voters if he launches a bid for the White House.
But the state could never afford to pay for existing services and the new programs that Newsom and Democratic lawmakers enacted, according to an analysis of ongoing state spending since before the pandemic released by the Legislative Analyst’s Office last week.
Spending from the state’s principal operating fund has grown about $100 billion since Newsom’s first full fiscal year in office in 2019-20, mostly due to the growing cost of existing programs that he inherited. State spending has outpaced California’s strong revenue growth by about 10%, creating a perennial budget shortfall — a structural deficit — that Newsom and the Democratic-led Legislature solve with largely temporary fixes each year.
Instead of making across-the-board program cuts or raising taxes to align spending with revenue, Democrats have tapped into reserves designed to preserve social services for the state’s most disadvantaged communities during economic downturns.
While the California economy remains stable and state revenue has increased, Newsom and lawmakers have taken $12.2 billion from the rainy day fund. Democrats have borrowed $28 billion more from other state funds to cover their spending in recent years, according to the LAO.
“Taken together, these trends raise serious concerns about the state’s fiscal sustainability,” Legislative Analyst Gabriel Petek wrote in a review of Newsom’s January budget proposal.
Fiscal watchdogs have warned that the spending trends will leave California in a precarious position if the stock market tanks and tax receipts bottom out.
Personal income taxes are driving higher-than-expected revenue now, which analysts attribute to an artificial intelligence boom on Wall Street, and suggest the state could have no deficit in the upcoming year. In January, the Newsom administration anticipated significant operating deficits in the years ahead: $27 billion in 2027-28, $22 billion in 2028-29 and $23 billion in 2029-30.
“This issue is really whether they’re going to take seriously the structural deficit that is several years in the making now, where the spending has outpaced revenue, and to address that, they’re going to either have to make some fairly deep cuts or raise revenue and or both,” said former state Controller Betty Yee, who worked as a budget aide under Gov. Gray Davis and recently dropped her own campaign for governor. “But they have to be real. I think resorting to these one-time solutions has really exacerbated the problem.”
H.D. Palmer, a spokesperson for the California Department of Finance, said the governor is looking to solve the budget problem with more than a temporary fix.
“Although he is still finalizing his proposal that he’ll put forth to the Legislature, as he has said, he wants those solutions to be durable, and he wants them to have an impact beyond a single fiscal year,” Palmer said.
To stabilize California’s budget, Democrats will probably have to raise taxes or fees to generate new revenue and cut programs, according to the LAO. At least 40 cents for every dollar in revenue is dedicated to education under the state Constitution, requiring policymakers to find between $30 billion and $60 billion annually in additional revenue to cover projected shortfalls in 2027-28 and beyond if relying on new taxes alone.
President Trump’s cuts to healthcare are adding to the problem.
HR 1 will add $1.4 billion in state costs to the general fund. Newsom’s January budget proposal did not include a plan to help millions of low-income Californians who are expected to lose access to healthcare under the federal cuts.
To temper those cuts in California, other groups proposed a new tax on billionaires that appears poised to qualify for the November ballot.
Spearheaded by Service Employees International Union-United Healthcare Workers West, the initiative would apply a one-time 5% tax on taxpayers with assets exceeding $1 billion. If approved by voters, the tax would generate roughly $100 billion, which would fund healthcare programs.
The measure has divided unions and Democrats at the state Capitol.
Newsom has criticized the initiative, citing concerns that increasing taxes on the wealthy will have the opposite intended effect and drive the highest earners out of California. Under a progressive tax structure, the state budget is dependent on income taxes paid by the ultra-rich on earnings largely from capital gains.
Larry Page and Sergey Brin, the co-founders of Google, have already purchased residences in Florida, along with others looking to escape the tax if it goes through in November. Billionaires launched their own ballot measure campaign to undercut the tax proposal.
State lawmakers are also considering avenues to raise revenue, which include repealing a “water’s edge” tax break. Under the change, multinational companies would no longer be allowed to shield the income of their foreign subsidiaries from state taxes. California loses about $3 billion in revenue from the tax break each year.
In its budget plan released in April, the state Senate proposed a new fee on the largest corporations in the state to provide $5 billion to $8 billion annually for Medi-Cal.
The upper house said 42% of Medi-Cal enrollees are full-time workers who are not enrolled in their company’s healthcare plan because their wages are low enough to qualify for state-subsidized healthcare. As a result, corporations aren’t paying for healthcare for many of their employees and instead taxpayers are picking up the bill through Medi-Cal.
SEIU California, the powerful state union council representing over 700,000 workers, endorsed the plan. The union said Trump’s tax policy will reduce corporate taxes by $900 billion, while 3 million Californians lose healthcare.
“In this urgent moment, California’s workers need to see our leaders show us what they’re made of,” said Tia Orr, executive director of SEIU California. “The Senate is showing the courage to demand corporations pay their fair share, rather than making working people pay with their lives.”
The change is being described as a more politically palatable “fee” and not a tax.
“We explored multiple revenue options, and this was the one that felt more narrow, it felt more focused, and it also felt like it was directly going for the subsidy that’s being lost because of the Trump HR 1 cuts,” said Senate President Pro Tem Monique Limón (D-Goleta), who leads the upper house of the Legislature.
Limón said her caucus believes it’s important to address potential revenue streams because of the depth of federal healthcare reductions.
“If we don’t address the structural deficit, we are looking at severe cuts,” she said. “You are looking at people without health insurance. You are looking at hospitals closing down. You are looking at medical providers not being able to take more patients. You are looking at our emergency rooms over capacity, with not enough medical providers. I mean, you’re looking at a place that’s really, really, really difficult, and we feel like we have to, at least, look at what are viable options that are conditional on these cuts coming.”
Newsom has not commented publicly on the Senate’s plan. As governor, he’s been reluctant to embrace new taxes and fees.
Newsom could reject all the proposals for new taxes or fees and continue what he’s done before: take advantage of higher-than-expected tax collections, shift funds around, delay program implementation and borrow money to knock the deficit down to zero, or forecast a surplus, for his last budget year that begins July 1.
If he doesn’t take on California’s larger budget imbalance, then the problem would be the next governor’s to solve. A stock market crash, or economic recession, could force his successor to make drastic cuts across the board with limited reserves to support programs.
Kicking the can again would cement Newsom’s fiscal legacy as a governor who championed bold headline-making policies that bolstered the safety net for low-income Californians, but who failed to provide a solution to pay for his agenda.
“Not only has he not come up with a plan, he has pretended we don’t need one,” said Patrick Murphy, a professor of public affairs at the University of San Francisco.
Newsom’s interest in running for president could seemingly discourage him from slashing the budget and raising attention to the state’s financial woes, Sragow said. Newsom is setting himself up as a potential front-runner for his party. He has said he remains undecided about officially launching a 2028 campaign.
As a Democrat from California, his opponents would automatically label him as financially irresponsible and tax-happy. Calling out the massive budget problem on the horizon, raising taxes and making painful cuts will give them ammunition.
“There’s a long list of things that he’s going to be charged with, and this is likely to be one more,” Sragow said. “But I guess the question is, is he going to be charged with a political misdemeanor or a political felony?”
Former state Sen. Steve Glazer said Newsom is standing on political quicksand either way. State budget projections are based on assumptions about the future that often don’t bear out, leaving his choices exposed to criticism that he went too far, didn’t do enough, and everything in between.
“Whatever the governor decides to do in his May revise and in his final budget, it’s fraught with political risks, because it can be manipulated so easily by all sides,” Glazer said.
If Newsom ignores the spending problem, his successor could blame him for California’s financial woes when they take office in January and provide their own outlook of the state’s fiscal future. At the time, Newsom could be trying to convince America to make him the nation’s next president.
Murphy said Newsom has championed major policies and been reluctant to back off them later when revenue doesn’t pencil out.
In terms of spending, he’s governed similarly to the men who led California before him, with the exception of Jerry Brown, who cut programs to reduce a deficit he inherited in his second stint in the governor’s office and left Newsom with a surplus.
“It’s not all that different than most of the governors have done, which is finding it very hard to say no and finding it very hard to take on a tough choice of going to the ballot to ask for more money or raise taxes,” Murphy said.
Deukmejian left a budget disaster for his successor, Gov. Pete Wilson. Deukmejian publicly claimed he passed a balanced budget in his final year and blamed an economic downturn for the problems Wilson encountered.
When Wilson announced a record $13-billion budget deficit early in his first year in office in 1991, he said the Persian Gulf War, an economic downturn and natural disasters added to a structural deficit in the budget.
The Legislature and Deukmejian, Wilson said, had “papered over” the problem.
Germany’s Dax, France’s CAC 40, Italy’s FTSE MIB and the UK’s FTSE 100 are expected to open in the green, according to IG data, despite peace talks between the US and Iran coming to a halt.
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The White House called off plans to send envoys to Pakistan for more negotiations and US President Donald Trump cited a lack of progress over the weekend.
“If they want, we can talk but we’re not sending people,” Trump told Fox News on Sunday. He said earlier on social media: “All they have to do is call!!!”
In addition to monitoring progress in the Middle East, investors will also be keeping across central bank decisions this week, including from the ECB and Federal Reserve.
Asia-Pacific markets mixed
Meanwhile, markets were mixed overnight in the Asia-Pacific region. Tokyo’s Nikkei 225 index hit a fresh record, surging 1.4% to 60,564.18. The Kospi in South Korea jumped 2.1% to 6,617.94. Hong Kong’s Hang Seng index edged 0.1% lower to 25,951.86 and the Shanghai Composite index was up 0.2% at 4,089.04. Australia’s S&P/ASX 200 slipped 0.3% to 8,759.40.
Taiwan’s Taiex rallied 2.6%, helped by a revival of buying of tech shares driven by the boom in artificial intelligence.
Oil prices rise again
In other dealings early Monday, the price for a barrel of Brent crude to be delivered in July, rose $1.44 to $100.57, while US benchmark crude oil added $1.28 to $95.65.
The dollar fell to 159.34 Japanese yen from 159.59. The euro climbed to $1.1723 from $1.1701.
Oil prices edged slightly higher, European indices traded flat, while Asian markets surged on Tuesday morning as investors monitored potential US-Iran negotiations and the final 48 hours of the current ceasefire.
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At the time of writing, US benchmark crude was up 8.5% from last Friday’s low to around $86.3 a barrel, while Brent crude, the international standard, was around 9.5% higher at roughly $94.5 a barrel.
As for European markets, the Euro Stoxx 50 and the broader pan-European Stoxx 600 were trading within a 0.2% range.
The UK’s FTSE 100, Germany’s DAX 30, France’s CAC 40 and Italy’s FTSE MIB were all similarly trading within a 0.3% range.
On Wall Street, US futures were also all trading within a 0.3% range with the tech-heavy Nasdaq leading. The S&P 500 closed marginally lower by 0.2% on Monday at 7109 points.
Despite US representatives, including special envoy Steve Witkoff and senior adviser Jared Kushner, travelling to Islamabad as part of renewed efforts to secure an agreement, no concrete progress on US-Iran negotiations has been announced.
The Strait of Hormuz remains closed and the current ceasefire ends on Wednesday keeping markets in a state of uncertainty.
US President Donald Trump has asserted that the deal currently being negotiated will be better than the Joint Comprehensive Plan of Action (JCPOA), which was signed by US President Barack Obama in 2015 and from which Trump withdrew in 2018.
Latest on US-Iran negotiations
Following the arrival of US representatives to Islamabad there has been no developments on the negotiations with Iran.
Even though US President Donald Trump confidently declared that there is a historic deal in the works, public statements from major Iranian figures seem to indicate otherwise.
Mohammad Ghalibaf, the speaker of Iran’s parliament and the person previously heading the talks with the US, made sweeping declarations via X on Monday stating that the country will “not accept negotiations under the shadow of threats” and “has prepared to reveal new cards on the battlefield”.
Previously, other Iranian representatives have also described US demands as “excessive”.
For the time being, markets eagerly await developments and are highly sensitive to any headlines about the situation.
Associated British Foods and Primark demerger
Although European markets are trading flat, major news in the retail consumer sector has come out of the UK.
Associated British Foods (ABF) is poised to announce the outcome this week of a strategic review into demerging its fast-fashion retail arm Primark, from its diversified food business.
The conglomerate, controlled by the billionaire Weston family, has been working with advisers from Rothschild & Co to assess whether the split would maximise long-term shareholder value.
Analysts argue the move makes sense because of the limited operational synergies between the two divisions: the food arm generates steady cash flows from brands such as Twinings, Patak’s, Jordans cereals and Allied Bakeries, while Primark has pursued aggressive international expansion in a fiercely competitive retail sector.
The decision comes as ABF faces tough trading conditions, with the group warning in January of flat annual sales and declining profits, further pressured by rising costs and the fallout from the Iran conflict, including potential increases in petrochemical prices.
