Iran says it’s up to Trump to choose between war and diplomacy

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Yields in the U.S. bond market cranked higher Monday and again reached their highest levels in roughly two decades, which knocked U.S. stocks further from their record high.

Monday’s rise in yields followed the latest swings for oil prices, which have been yo-yoing on uncertainty about when the war with Iran will allow tankers to flow freely again through the Strait of Hormuz and deliver oil from the Middle East to customers worldwide.

The latest turns came after President Trump said over the weekend he’s rejecting an offer from Iran to reopen the Strait of Hormuz and resume talks on its nuclear program.

A move by the U.S. to temporarily halt diesel exports amid record-high prices would initially lower costs, but a prolonged ban could drive up domestic gasoline prices, according to Goldman Sachs.

President Trump on Sunday told reporters his administration is “very seriously” considering a ban on diesel exports. Calls to restrict exports of U.S.-refined diesel have picked up in recent weeks, mostly from Republican lawmakers, as a lever they believe will help lower prices. Diesel hit a record $6.53 a gallon on Sept. 22, and has only eased slightly since then, slipping to $6.45 a gallon on Monday, according to AAA data.

The war with Iran is pushing up oil and gas prices, creating widespread financial strain on U.S. motorists, food delivery drivers and farmers.

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Yemen’s defense ministry said it carried out 356 strikes against Houthi military targets over the past 24 hours, killing or wounding an estimated 476 fighters.

Video posted by the Yemeni military showed strikes on various Houthi positions across several front lines.

Military spokesman Col. Majed al-Nazili said the strikes targeted Houthi command centers, weapons depots, artillery positions, vehicles and other military equipment.

The U.S. and Iran are continuing to have discussions, viewed as positive and constructive, through mediators, but there will not be a deal unless the nuclear issues are addressed, according to a U.S. official.

President Trump is willing to give Iran sanctions relief and release frozen funds if there is concrete progress on nuclear issues, the official said. Iran has indicated it is flexible on nuclear issues, but the two sides still remain apart on the timing of commitments and who takes which steps first.

The official said the U.S. is skeptical of Iran’s promises after it broke the memorandum of understanding by firing on commercial vessels, and is looking for assurances that Iran is serious.

Flying out of Iran has long required patience in the face of restrictions and delays, but new U.S. sanctions have grounded flights on short notice and left war-weary travelers feeling trapped as they try to leave the country.

Passengers who booked tickets out of Iran to Middle Eastern destinations like the United Arab Emirates, Iraq, Oman and Turkey have faced short-notice cancellations as the latest sanctions bite.

Among those scrambling for a way out is Mitra, a 49-year-old woman who had planned to travel to Paris via Istanbul along with her brother, but who now faces a long journey by road to get to Turkey.

“Some airlines are still selling tickets, but they keep getting canceled. It honestly makes us feel completely trapped,” she told an AFP journalist in Paris, using a pseudonym for fear of retribution by authorities.

“When we were told that flights had been suspended, we decided to travel to Istanbul by land instead,” she said.

Mitra described paying around $75 to book a flight to the Iranian city of Tabriz, from where she will travel by road for several hours to reach the border.

In Van in Turkey, they will stay at a hotel, because the wait at the border can be long and chaotic.

“At this point, we’re just hoping that we can actually get out. They might even close the land border,” she fears.

An Israeli court on Monday released on bail a Palestinian-American journalist who had been detained for nearly two weeks on charges including working for Iran, her lawyer told the AFP news agency.

An AFP journalist saw Naqaa Hamed, who has contributed to Iran’s state-run Press TV, being released at a checkpoint near Jenin in the Israeli-occupied West Bank.

Hamed’s lawyer Khaled Mahajneh told AFP that an Israeli military court released her on bail of 8,000 shekels — about $2,600 — and on condition she comply with future summons for questioning.

Mahajneh said Hamed spent “two weeks of detention under difficult conditions at Damon prison” in the northern Israeli city of Haifa.

The Israeli military arrested Hamed on Sept. 15 at a checkpoint near Bethlehem as she was returning from a reporting assignment for Turkish broadcaster TRT, according to her family and a journalist who was accompanying her at the time.

Press TV, which is owned by the Iranian state, reported on her arrest and release and described her as its West Bank correspondent.

Colleagues said Hamed, who holds U.S. citizenship, had stopped working with Press TV about a month earlier and had become a freelance journalist.

The Israeli government considers Press TV a propaganda arm of Iran’s government.

Israel is currently holding 36 journalists in its prisons, according to the Palestinian Prisoners’ Club, an NGO working for prisoners’ rights.

Rising oil prices are knocking the U.S. stock market further from its record high on Monday, while building pressure even higher within the U.S. bond market.

The S&P 500 fell 0.8% and gave back most of its gains from last week, which had brought it to the brink of its all-time high. The Dow Jones Industrial Average was down 372 points, or 0.7%, as of 11:45 a.m. Eastern time, and the Nasdaq composite was 1% lower.

Most of the U.S. stock market sank under the weight of a 2.8% rise for the most actively traded contract in the market for Brent crude oil to $100.19 per barrel. That overshadowed a gain for Wall Street’s most influential stock, Nvidia, after it announced a historic funneling of cash to its investors through a buyback of its shares.

Oil prices have been yo-yoing on uncertainty about when the war with Iran will allow tankers to flow freely again through the Strait of Hormuz and deliver oil from the Middle East to customers worldwide. The latest turns came after President Donald Trump said over the weekend he’s rejecting an offer from Iran to reopen the Strait of Hormuz and resume talks on its nuclear program.

“I’d like to make a deal, too,” Mr. Trump said Saturday. “But that deal would not be acceptable.”

Brent climbed above $101 per barrel Monday morning, before the U.S. stock market opened for trading, but it pared its gains as U.S. officials said mediators were still working with Iran and the United States on a deal to end the fighting and open the strait.

For all its ups and downs, a barrel of Brent remains much higher than the roughly $72 it cost before the U.S. and Israel attacked Iran in late February. That has helped worsen inflation, and the average price for a gallon of regular gasoline is up to nearly $4.48 from $3.13 a year ago, according to AAA.

Iranian Foreign Minister Abbas Araghchi is scheduled to meet mediators in New York on Monday morning to discuss the latest proposals and efforts to revive negotiations with the United States, Iran’s semi-official ISNA news agency reported.

According to ISNA, Iran has proposed reopening the Strait of Hormuz as part of a deal to end the war, in exchange for the release of Iranian funds and assets that Tehran says have been unlawfully blocked.

The proposal was conveyed to the U.S. through mediators in New York. Although President Trump rejected the offer over the weekend, Iranian officials say indirect contacts and mediation efforts continue.

Araghchi said Iran is awaiting a response via the mediators before deciding its next steps. He reiterated that any move toward reopening the Strait of Hormuz would depend on Iran’s conditions being met, saying Tehran would not back down from its conditions.

“We are waiting for the definitive opinions to be conveyed to us by the mediators and we will make a decision based on that,” ISNA quoted Araghchi as saying.

No representatives from the U.S. side will be attending Monday’s meeting, the report said.

“We are waiting for the definitive opinions to be conveyed to us by the mediators and we will make a decision based on that,” ISNA quoted Araghchi as saying.

No representatives from the U.S. side will be attending Monday’s meeting, the report said.

British counter terror police released on bail five British men arrested over the weekend near a Royal Air Force base used by U.S. forces to launch strikes on Iran.

Metropolitan Police Assistant Commissioner Laurence Taylor, head of Counter Terrorism Policing, said the men were being released following “extensive interviews,” adding that the investigation was not over and they remained “subject to stringent conditions on their movement and contact with others.”

Referring to reports that British authorities were investigating a possible link to Iran, he said: “I know there is significant interest in whether the current geopolitical context has a bearing on this incident.”

“At this stage we are keeping an open mind in this investigation … be assured, we are considering this from every possible angle. Including that this may be activity committed by proxies, or individuals either knowingly or unknowingly working on behalf of a foreign state.”

Iran said Monday that it “categorically denies” any involvement in the incident.

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Iran “categorically rejects” claims that it was involved in a suspected terror plot on a British military base hosting U.S. aircraft, its embassy in London said Monday.

British counterterrorism police were leading an investigation Monday after five men were arrested on suspicion of preparing a terrorist act in an English village near a Royal Air Force base used by U.S. bombers.

The Associated Press reported that British authorities are investigating the possibility of a link between Iran and the arrests near RAF Fairford, but that as of Monday there had been no conclusions reached about whether the apparent plot against the base could have been state-backed.

This year, groups with purported links to Iran have carried out several attacks on U.K. soil, primarily targeting the Jewish community in north London.

The U.S. and Iran are expected to have separate talks with mediators on Monday or Tuesday, an official with knowledge of the negotiations told the Reuters news agency.

With Iran’s Foreign Minister Abbas Araghchi in the U.S., as well as Qatari mediators, the talks are set to focus on an updated version of the seven-day proposal Iran gave to U.S. counterparts last week during the United Nations General Assembly, the official told Reuters.

President Trump said Sunday that he expected talks with Iran to resume in the coming days, a day after he rejected a new proposal put forward by Tehran last week for a seven-day ceasefire and phased reopening of the Strait of Hormuz.

“They want to make a deal, but it is not the deal that I want to make,” Mr. Trump told Axios. “It is what we would have maybe agreed to a year ago.”

Saudi Arabia has resumed exporting oil using its crucial East-West Crude Oil Pipeline after drone strikes earlier this month forced it shut, according to a source with direct knowledge of the matter quoted by Bloomberg.

Saudi Arabia had been using the pipeline to transport oil from its eastern production hubs to its Red Sea ports for export — a vital alternative route as shipping through the Strait of Hormuz has remained severely disrupted by the U.S.-Iran war.

The pipeline was shut down earlier this month after a series of drone attacks that Saudi authorities blamed on Iran-backed militias in Iraq.

The state-run energy giant Saudi Aramco, which operates the kingdom’s oil infrastructure, tested the pipeline last week and has now resumed overseas shipments via the Red Sea route, a source familiar with the operation told Bloomberg.

Iran’s Houthi allies in Yemen have vowed to impose a blockade of Saudi Arabia’s Red Sea ports and against Saudi ships, and they have targeted several vessels in the region.

Iran has lodged a complaint with the United Nations over U.S. sanctions against its aviation sector, which have forced the cancellation of many flights across the region, state media reported Monday.

The U.S. imposed restrictions this month on the entire Iranian aviation industry and vowed to take a hard line against any companies or countries that continue to assist it.

As the sanctions took effect last Wednesday, some major airlines were forced to cancel international flights as several nations in the region implemented bans.

“To defend the legitimate rights of the aviation industry and counter illegal restrictions imposed by America, Iran has drafted and submitted a formal protest to the International Civil Aviation Organisation (ICAO),” said civil aviation chief Abouzar Shiroudi, according to Iran’s official IRNA news agency.

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Iranian Supreme Leader Ayatollah Mojtaba Khamenei has been quoted as predicting that U.S. military forces will soon be driven out of the Arabian Sea.

In a message to mark Iran’s Sacred Defense Week, the ayatollah — who has not been seen or heard from directly since the war began — said U.S. forces were unable to advance beyond the Arabian Sea, which leads to the Strait of Hormuz, “because of the painful blows they have received.”

He added that soon, U.S. troops would be driven from the Arabian Sea, too.

U.S. forces have operated across the region since the war began, including to escort commercial vessels through the Strait of Hormuz in defiance of Iran’s bid to control traffic through the vital waterway.

The wide-ranging message attributed by Iranian state media to Khamenei included praise for Iran’s military forces, as well as for the former leader of the Iran-backed Hezbollah group in Lebanon.

Khamenei was named Iran’s new supreme leader soon after his father and predecessor, Ali Khamenei, was killed in the first round of U.S.-Israeli strikes, which sparked the war on Feb. 28.

The younger Khamenei has not been seen, even in video, since he was named the supreme leader, and senior U.S. officials have said he was likely seriously wounded in the same strike that killed his father.

The Iranian rial has fallen to a new historic low against the U.S. dollar, with the free-market selling rate surpassing 2.4 million rials per dollar on Monday.

Data from Pashizi, which tracks Iran’s free-market exchange rates, put the dollar at around 2.4 million rials as Iran faces high inflation, sweeping sanctions and growing disruption to foreign trade.

Annual inflation has reached 61.4% in August, while food prices are reported to have risen 128% from a year earlier, according to data from Iran’s Statistical Center.

Iranian state media said Monday that Iran’s delegation at the U.N. General Assembly in New York had no plans to hold direct talks with the U.S., after President Trump said he expected more negotiations to take place this week.

“Iran’s delegation in New York has no plans for negotiations with the United States,” said the official IRNA news agency, citing an unnamed source close to the group.

Mr. Trump told Axios on Sunday he expected negotiations to continue this week, and added that the Iranian leaders were interested in reaching an agreement because they are “losing badly.”

“Iran’s views and positions were conveyed clearly and explicitly to the U.S. side … via a Qatari mediator,” IRNA said, adding that the Iranian delegation would return to Tehran on Tuesday.

Since the outbreak of the war in February, negotiations between Tehran and Washington have occurred largely through mediators.

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U.K. police said five men arrested in the early hours of Sunday near an air base used by the United States during its war against Iran were being held on suspicion of preparing a terrorist act that appeared to involve three trucks.

RAF Fairford, a U.K. Royal Air Force base about 85 miles west of London in rural Gloucestershire, has been used by American bombers to conduct strikes against Iranian missile sites. The British government, under an agreement made under former Prime Minister Keir Starmer, granted the U.S. permission to use Farford and other key U.K. bases provided it was only for strikes defined as defensive in nature.

Authorities are investigating a link between the arrests in Fairford and Iran as one possibility. Iranian authorities have declared all bases used to attack Iranian territory as legitimate targets.

President Trump praised those who were involved in making the arrests.

“It was an amazing job. We had them under investigation. They were looking to do big damage to our fort. And working with the British worked out great,” he told reporters in Chicago on Sunday. “We had them under view for a long time and we got them.”

Iranian Foreign Minister Abbas Araghchi said Sunday that Tehran was ready for either diplomacy or a return to fighting in the war sparked seven months ago by joint U.S.-Israeli strikes on Iran. He said it is now up to President Trump to choose which direction to go.

“We are fully prepared for the time for the war to be resumed, and I repeat, we stand firm in the face of any new aggression, even if it comes to a doomsday war,” Araghchi told NBC News’ “Meet the Press.”

“At the same time, we stand ready for diplomacy. It is up to President Trump to choose,” he said.

President Trump on Saturday rejected Iran’s proposal to return to a ceasefire agreement that collapsed months ago as part of a seven-day plan that would see it reopen the Strait of Hormuz to commercial shipping.

Araghchi said Tehran would wait for an official response from mediators.

President Trump said Sunday that he expects talks with Iran to resume in the coming week, a day after he rejected a truce proposal put forward by Tehran.

“They want to make a deal, but it is not the deal that I want to make,” Mr. Trump told Axios in a phone interview on Sunday. “It is what we would have maybe agreed to a year ago.”

Iran said Friday it had submitted a proposal to the U.S. to reopen the Strait of Hormuz over seven days, but Mr. Trump asserted that Iranian leaders wanted the deal because “they are losing so badly.”

“They overplayed their hand,” Mr. Trump told Axios.

The president said resuming strikes on Iran was not off the table, adding: “I am always thinking about it.”

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Republican Sen. John Kennedy of Louisiana said Iran’s proposed plan to reopen the Strait of Hormuz and restart talks was “not a serious offer.”

“The president’s not Bambi’s baby brother. He turned it down,” Kennedy said Sunday on “Face the Nation with Margaret Brennan.”

“We need to continue doing what we’re doing — the sanctions, the blockade,” said Kennedy.

“Now there’s just one problem: The strait is at least partially closed, and it’s affected the price of oil. And oil’s in everything, including gasoline, and it’s painful as hell,” he said, adding: “We’ve got to either figure out a way to settle this thing, to get the strait open, or to escalate.”

Kennedy said he would not support sending U.S. ground troops into Iran, however.

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