US missiles struck targets across Iran on Friday and President Donald Trump vowed "major military punishment" for Tehran and its Houthi allies in Yemen, though he once again left open the door to a diplomatic deal with Iran.
Two weeks after the collapse of an interim truce meant to end the war, Iranian armed forces responded by firing at US bases in neighbouring Arab countries and warning that they could strike non-military buildings there used by US personnel.
Trump has threatened in recent days to widen targets to Iran's energy plants and bridges, send ground forces to seize its oil hub of Kharg Island, and bomb a deep-underground nuclear-linked site known as Pickaxe Mountain.
On Friday, he said he had not yet made a decision on new major strikes, however.
"We are talking to them," Trump told reporters at the White House. "I think they're being serious. I think ... they are being by far the most serious that we've seen them, but that doesn't mean we get there."
Asked what the exit strategy was for the Iran war, Trump said, "There's a military exit where we just keep going just the way we are, and we can even make it a heavier dose, and it's knocking out everything they have. Or there's a smarter strategy that you make a deal."
But he added, "We're locked and loaded. We're ready to go."
Later in the day, Trump said Israeli Prime Minister Benjamin Netanyahu would visit the United States next week. The two leaders are expected to meet on Tuesday as the US-Israeli war on Iran completes five months.
The key waterway of the Strait of Hormuz, the entrance to the Gulf, has so far been the focus of a war that has killed thousands in almost five months, stoked global inflation and fanned fears of an economic downturn.
The Houthis, who control northern and western Yemen, have also declared a naval blockade of Saudi Arabia, which has diverted millions of barrels of oil by pipeline each day to the Red Sea to skirt Iran's near-total blockade of Hormuz.
After the Houthis said they had struck two Saudi tankers in the Red Sea on Thursday, Trump said he would hold Iran accountable for any further attacks by the fighters.
A Saudi vessel sustained minor hull damage from an attack in the Red Sea on Friday, state news agency SPA said.
The Saudi-led coalition in Yemen said it struck Houthi military sites there, saying they were used to threaten commercial shipping.
Reuters could not immediately verify the reports.
Iran threatens US forces
The US military launched air strikes on Iran late on Thursday and early on Friday, racking up 13 consecutive nights of attacks.
In a statement on X, the Iranian health ministry said 59 people had been killed and 666 wounded since the resumption of clashes with US forces in late June.
Iranian media cited the head of Iran's top joint military command as saying Iran would kill a member of the US forces for every Iranian killed.
The war has killed 18 US service members. The Pentagon has said 100 service members had been injured since July 7. Officials have told Reuters that more than 500 US troops have been injured so far.
Pakistan exploring path for talks, sources say
Brent futures stood down more than $4 at a little over $96 on Friday, after the previous day's attack on the Saudi tankers in the Red Sea's Bab el-Mandeb strait boosted oil prices 7% to $100 per barrel for the first time since May.
Sources said Pakistan was exploring a path towards resuming stalled talks between the US and Iran to end the war, after China initiated a push.
Exploratory discussions took place during a visit by Iran's Interior Minister Eskandar Momeni to Islamabad this week — his second in the last 10 days, three Pakistani sources said.
Tankers rerouting, shipping insurance rises
The Houthi attacks forced several other tankers to turn around and head north through the Suez Canal, which would be a much longer route to Asia, by sailing around Africa.
Still, half of the 18 ships exiting Bab el-Mandeb on Thursday were carrying crude oil, including two Chinese supertankers, while the number of tankers crossing through the Strait of Hormuz fell to just one, the lowest since May 7.
US warns citizens in Mideast to exercise caution
The Iranian army said it had attacked US military equipment depots at Al-Adiri, officially named Camp Buehring, in northern Kuwait, and the positions of US troops at Camp Arifjan and at Camp Doha, near Kuwait City.
In the early evening, Kuwait said its air defences were intercepting "hostile" targets launched from Iran.
Iran's Revolutionary Guards said they had significantly damaged a surveillance tower used by the US Fifth Fleet in Bahrain.
