USIran

As the US and Iran move closer to a peace deal, Israel says it reserves the right to keep attacking regional ‘threats’, including in Lebanon, despite any US‑brokered ceasefire. Meanwhile, criticism within Israel is growing over Netanyahu’s handling of the war.

Japan’s stock market surges to record high on hopes of an end to US-Israel war on Iran.

Oil prices have fallen sharply amid tentative hopes for a deal to end the US-Israel war on Iran.

Brent crude, the primary benchmark for global oil prices, fell about 5 percent on Sunday as US President Donald Trump gave mixed signals on the prospects for a permanent end to the conflict.

Brent futures for July stood at $98.47 a barrel as of 01:05 GMT, down about 9 percent from a month ago but still up by more than a third compared with before the start of the war.

Japan’s benchmark stock index, the Nikkei 225, surged more than 3 percent in morning trading, hitting an all-time high after closing at a record peak on Friday.

Trump said in a social media post on Sunday that negotiations with Tehran were proceeding in an “orderly and constructive manner”, but he had instructed officials “not to rush into a deal”.

“Both sides must take their time and get it right. There can be no mistakes!” Trump wrote on Truth Social.

Trump’s remarks came after he raised hopes for a breakthrough on Saturday by announcing that a deal had been “largely negotiated,” with the terms including the reopening of the Strait of Hormuz.

“Fundamentally, there is no change to the underlying picture, where 10-11 million barrels per day of crude oil continue to be shut-in for every day the Strait of Hormuz remains shut,” June Goh, a senior oil market analyst at Sparta in Singapore, told Al Jazeera.

“However, markets are expecting a gush of 100 million barrels of crude oil from the stranded ships to flow out once the deal is in place.”

Goh said markets are likely to remain on edge for some time after any deal is finalised.

“Sparta estimates still about three to six months required to get everything back to status quo, including time to bring production and refineries back online,” Goh said.

Iran has effectively blockaded the strait since the start of the war in late February, disrupting about one-fifth of the global oil trade.

The US has imposed its own blockade of Iranian ports since mid-April, further disrupting commercial shipping in the waterway.

In his Truth Social post on Sunday, Trump said the US blockade would remain “in full force and effect until an agreement is reached, certified, and signed”.

EXPLAINER

US and Iran continue mediated talks, exchanging draft proposals aimed at reaching a formal agreement.

Iran and the United States are continuing mediated talks aimed at ending the conflict, with Iranian media reporting that both sides are exchanging messages and draft proposals to establish a formal framework for an agreement.

Al Jazeera’s correspondent Almigdad Alruhaid reported from Tehran that Pakistani officials were engaged in “intense mediation activity” between the two countries.

The diplomatic push comes as US Secretary of State Marco Rubio said there were “some good signs” for a possible breakthrough. However, US President Donald Trump also warned Washington could take “very drastic” action if Iran refuses to give up its uranium stockpiles.

Here is what we know:

In Iran

• ‘War crime’ on medical research centre: Iran has accused the US and Israel of committing a “war crime” by bombing the Pasteur Institute of Iran early in the war, after The Lancet journal warned that the attack severely damaged a key pillar of the country’s public health system.

• Thousands rescued from rubble: The Iranian Red Crescent said its aid workers rescued more than 7,200 people trapped beneath rubble during US and Israeli attacks, sharing footage of survivors being pulled from destroyed buildings for the first time.

War diplomacy

• Nuclear ‘red lines’ must shift: Doug Bandow, a senior fellow at the Cato Institute, said the US and Iran will need to move beyond conflicting “red lines” on Tehran’s nuclear programme for negotiations to make progress. Speaking to Al Jazeera, Bandow said both sides must be willing to compromise and continue serious talks if they want to avoid further escalation and move away from war.
• Rubio sees ‘good signs’ in talks: US Secretary of State Marco Rubio said negotiations with Iran have shown “some progress”, while cautioning that it remains unclear whether a deal can be reached in the coming days. Rubio said President Donald Trump still prefers a diplomatic agreement, but warned Washington has “other options” if talks fail.
• Pakistani mediation efforts intensify in Tehran: Al Jazeera’s Alruhaid said senior Pakistani officials are engaged in “intense mediation activity” in Tehran as efforts accelerate to prevent further escalation. While one senior Iranian official said negotiators were close to a deal and working on draft texts, another source cautioned it was still too early to say whether a final agreement was within reach.

In the US

• US forces at ‘peak readiness’:  CENTCOM said the USS Abraham Lincoln strike group remains at “peak readiness” in the Arabian Sea, sharing images of warplanes taking off as Washington maintains pressure on Iran amid ongoing mediation efforts.

• US reportedly suffers major Reaper drone losses: Iran has destroyed more than two dozen MQ-9 Reaper drones operated by US forces since the conflict began, according to Bloomberg News. The reported losses are estimated at $1bn, nearly 20 percent of the Pentagon’s pre-war inventory.
• US pauses Taiwan arms sales: Acting Navy Secretary Hung Cao told a Senate hearing that Washington has paused a $14bn arms sale to Taiwan to ensure the US has enough munitions for its military campaign against Iran, a move Republican Senator Mitch McConnell called “distressing”.

In Lebanon and Palestine

• Israeli strike kills two in southern Lebanon: The Israeli military said it carried out an air raid that killed two people near the Lebanon-Israel border, after detecting what it described as “suspicious movement” in southern Lebanon.
• US sanctions allies of Hezbollah: The US has imposed sanctions on nine people accused of helping Hezbollah undermine Lebanon’s sovereignty and obstruct efforts to disarm the group, including Lebanese politicians, security officials and Iran’s ambassador-designate to Beirut.

• Palestinian envoy condemns aid blockade: Palestine’s UN envoy Riyad Mansour said Israel is continuing to collectively punish more than two million Palestinians through its blockade on aid and ongoing attacks, warning the world must not become “accustomed to seeing Palestinians killed”.

• US urges humane treatment of flotilla detainees: According to Al Jazeera’s Ali Harb, the US State Department said activists detained by Israeli forces after attempting to break the Gaza blockade “must be treated humanely and consistent with international law”, while also reiterating Washington’s opposition to the flotilla movement.

A new opinion poll in the US suggests that 60 percent of Americans now oppose President Donald Trump’s war on Iran.