60-day ceasefire extension with Iran reached but Trump must approve, source says

The US and Iran have reached an outline agreement to extend their ceasefire, pending the approval of Trump.

A source familiar with the matter told Reuters that the two sides have reached an agreement on a memorandum of understanding to extend their ceasefire for 60 days, but Trump has yet to approve it.

The Trump administration has several times said that a deal to still the fighting was close, only to have Iran dispute or downplay the claims.

Read: Iran and US trade air strikes after Trump dismisses report of Hormuz deal

In recent days, Trump has come under pressure from Iran hawks in his own party, who have urged him not to make any agreement that fails to immediately address Iran's nuclear program.

The White House declined to comment.

The development came hours after the fragile peace between the United States and Iran was once again thrown into uncertainty following exchanges of air strikes by both countries on Thursday, further dimming prospects for de-escalation after President Donald Trump rejected a reported compromise deal with Tehran.

Iran targeted a US airbase after Washington struck what it described as an Iranian drone operation near the Strait of Hormuz.

A US official told Reuters that the military had shot down four Iranian attack drones and struck a ground control station in the port city of Bandar Abbas that was preparing to launch a fifth drone.

“These actions were measured, purely defensive and intended to maintain the ceasefire,” the official said, speaking on condition of anonymity.

The Islamic Revolutionary Guard Corps later said it had targeted the US base responsible for an early morning attack near Bandar Abbas airport, according to Tasnim news agency.

Also Read: Pentagon says US military personnel are reportedly being targeted using location data

Kuwait, which hosts a large US military base, said it was responding to missile and drone attacks without specifying their origin.

In Lebanon, which Iran says must be included in any broader agreement to end the war launched by Israel and the United States on February 28, Israel reportedly began striking civilian infrastructure in Tyre, claiming it was targeting Hezbollah infrastructure.

The Lebanese army said an Israeli strike killed one of its soldiers, while Israel claimed that hostile aircraft infiltration had triggered sirens in its north amid ongoing incursions into Lebanese territory targeting Hezbollah.

Oil prices rebounded, with US crude futures rising around 2.5 per cent after falling 5pc on Wednesday, while stocks declined and the dollar strengthened.

The war has killed thousands and sent global energy prices sharply higher, fuelling inflation and hitting currencies in some Asian ​countries while boosting the dollar.

Trump has repeatedly said the end of the war is close but told media at a cabinet meeting on Wednesday he was not yet satisfied by the talks with Iran ​and that the US was not discussing easing sanctions on the country, one of Tehran's demands.

Read More: Iran supreme leader says US, Israel seek to 'bring nation to its knees'

He dismissed an Iranian state TV report about an unofficial draft of an agreement to restore commercial shipping through the strait to ‌prewar levels ⁠within a month, with Iran and Gulf state Oman jointly managing traffic.

Trump said no single country would have control over the waterway, and appeared to threaten Oman, a country with which the US has decades-long military and economic ties.

"Nobody's going to control (the strait)," Trump said. "It's international waters, and Oman will behave just like everybody else or we'll have to blow them up. They understand that, they'll be fine."

Main issues between the US and Iran

Hormuz and Gulf blockade

Tehran sees its control of Hormuz, and Washington views its blockade of Iranian ports as their chief points of leverage.

Nuclear

The US believes Iran wants to build a nuclear bomb. Iran has ​always denied this, saying its atomic programme is ​for peaceful purposes only.

The focus is ⁠on its enrichment of uranium, which generates fuel for nuclear power but can also make material for a warhead.

The nuclear question is extremely complicated. An agreement may eventually be possible, including a lengthy moratorium on enrichment and the export or dilution of the stockpile.

Ballistic missiles

A main US demand before the war was that Iran limit the range of its ballistic missiles so that ⁠they could not ​reach Israel.

Iran has always refused to discuss its ballistic missiles, saying its right to conventional weapons cannot be ​on the table and that it still has a large arsenal.

Sanctions and frozen assets

Iran's economy has been hurt by sanctions for years, contributing to the nationwide unrest in January.

Tehran badly needs them to be lifted and tens of billions of ​dollars of Iranian oil revenues frozen in foreign banks to be released. It also wants reparations for war damage.