San Francisco Frontiers - Iran, US hold fire as Saudi Arabia intercepts drones

Fighting between the longtime foes has paused since early Saturday after 13 nights of renewed US strikes on the Islamic republic sparked by a breakdown in diplomacy over Iran's blockade of the Strait of Hormuz.

President Donald Trump's UN envoy had suggested the pause was to give negotiations a chance, but Tehran said there were no direct talks with the US to end the conflict, which began in late February with a wave of US-Israeli strikes and has rocked both the region and the global economy.

"Mediators may convey messages from the American side to us regarding current developments in the region. But at present, we are not engaged in any negotiations with the United States," said Iranian foreign ministry spokesman Esmaeil Baqaei.

Trump told US media outlet Axios that mediating countries had asked him to hold fire, adding: "We are in very deep talks with Iran".

"If they don't work out, we will go back to very strong military action," Trump said, warning he would not wait long for diplomacy to succeed.

Despite the lull, Saudi Arabia came under attack on Monday, with its defence ministry saying it had intercepted several drones fired by Iran-linked groups in Iraq targeting oil facilities.

No group claimed responsibility, but Riyadh called on Baghdad to prevent such attacks from being launched from its territory.

Yemen's Iran-backed Houthi rebels also said they launched drone attacks on Saudi Arabian oil infrastructure in response to incursions by the kingdom's drones. Riyadh is yet to comment on the claim.

Saudi Arabia and other Gulf nations accused pro-Iran militias in Iraq of launching waves of attacks on their territory during the conflict's earlier phase, but the groups haven't claimed any attacks in the region since the resumption of hostilities.

Elsewhere, the Israeli military, which has not joined the recent fighting, said it had intercepted two drones near the Jordanian border and was investigating where they had been launched from.

- 'Mafia gang' -

Global stock markets rallied and oil prices tumbled on Monday after the pause in strikes between Washington and Tehran.

It came as respite for Gulf shipping and the oil industry, with international benchmark Brent dropping more than four percent to $87 a barrel.

Control of the Strait of Hormuz remains a hurdle to any peaceful resolution, and Iran insists on managing the crucial conduit for oil and gas.

Its powerful Revolutionary Guards have been stopping vessels trying to transit the trade route in recent days, including six that state television on Monday said had sailed outside Iran's designated route.

Tehran says it has held talks in recent days with Oman, which also borders the strait, on "common principles and operational mechanisms" to ensure the safe passage of shipping.

In June, Muscat and Tehran said they would discuss imposing service fees, a move Washington opposes.

But Muscat also angered Iran after saying vessels could transit the Hormuz strait via its waters, with Tehran responding by attacking ships.

Iran's foreign ministry on Monday said the United States was not involved in the recent discussions with Oman.

Instead Baqaei criticised Washington, saying its conduct in recent years has "resembled that of a mafia gang that adheres to no rules or laws".

"So long as such behaviour by the United States continues, we cannot be hopeful about the emergence of a reasonable process," he said.

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C.Williams--SFF