Trump says US, Tehran having 'good talks' as drones hit Iran's neighbours

Highlights:

• President says US will return to strikes if talks don't yield results
• Iran has said it is not seeking to resume peace talks
• Saudi Arabia says it has shot down drones launched by Iran-backed armed groups from Iraq
• Oil prices tumble after US pauses air campaign
• US official says military commanders advised Trump they were running out of targets

President Donald Trump said on Monday the United States was having "good talks" with Iran and there was a chance of a deal over their conflict, but he warned that US strikes would resume if the negotiations failed to deliver.

Despite Trump's optimism, Tehran appeared to quickly test the pause in the US military campaign, with Saudi Arabia, Jordan and Iraq reporting drone attacks on Monday.

Washington abruptly suspended a two-week campaign of air strikes on Iran on Saturday in Trump's latest strategic U-turn in the five-month-old conflict.

"We're having good talks," he said. "I think there's a good chance that something could happen, and if it does, good, if it doesn't, we go back to doing what we were doing two days ago."

At a campaign rally in Michigan later on Monday, Trump said of Iran: "You can't bribe them. You've got to beat them, and we'll beat the hell out of them. But we'll see how it turns out. Right now, there are very friendly negotiations going on."

Iran's Foreign Ministry spokesman Esmail Baghaei said on Monday that messages were still being passed between the sides through mediators and Iran had not forsaken diplomacy, but reports that it requested negotiations were "fabricated."

"This is not in our DNA," he said.

A senior Iranian official told Reuters on Sunday that Iran would halt its own attacks as long as Trump's self-imposed ceasefire continued.

Iran's central military command later on Monday accused the US of threatening vessels and oil tankers in its territorial waters and of "attempting to implement an illegal maritime blockade", which it said "constitutes an escalation of the conflict in the region."

Saudi Arabia said it shot down drones aimed at petroleum targets, including in Riyadh. It said they had been launched from Iraq by Iran-backed armed groups, and it reserved the right to respond.

Separately, Iran's Houthi allies in Yemen said they had targeted the East-West Pipeline carrying oil to Saudi Arabia's main Red Sea port of Yanbu in retaliation for Saudi drone incursions.

Tehran also said it remained in control of the contested Strait of Hormuz, the key waterway for global energy supplies, which Trump has demanded vessels be able to pass through freely.

Oil prices tumble

Public disapproval of the war has been weighing on Trump and his Republican Party ahead of November midterm elections in which they have to defend slim congressional majorities.

A Reuters/Ipsos poll conducted over the weekend showed Trump's approval rating ticking higher to 37%, up three points from last month when it tied the lowest of his presidency.

However, just one in three Americans support the Iran war, the lowest Reuters/Ipsos reading since the conflict's early days, with most saying Trump has failed to explain his goals.

The end of the US campaign after 13 successive nights of intensifying bombing and Trump's remarks on talks sent oil prices tumbling. US crude fell 8.21% to $81.98 a barrel, and Brent fell to $87.77 per barrel, down 9.31% on the day.

Trump's decision to suspend US attacks reflected advice from his military that the bombing had reached the limits of what it could achieve, according to a US official and several US media reports.

The US official told Reuters military commanders had advised the president they were running out of targets and that the chairman of the Joint Chiefs of Staff, General Dan Caine, had expressed concern over the depletion of air munitions.

Trump dismissed suggestions that the US faced munitions shortages, saying the military was rapidly rebuilding inventories depleted by shipments to Ukraine. He said he would like more of "the more sophisticated stuff."

Iran media say six ships turned back

Iranian state media outlets cited an "informed source" as saying that Iran had turned around six "offending ships" on Monday that had attempted to cross the Strait of Hormuz without permission.

Trump launched his renewed bombing campaign to punish Iran after Tehran fired on ships using a route promoted by the United States, which told vessels to sail close to the coast of Oman.

Iran says ships may pass only through a Hormuz channel that runs closer to its own coast, which it controls and where it intends to impose transit fees.

The two weeks of renewed US bombing killed scores in Iran and destroyed bridges and tunnels across the south as well as military targets.

Four US service members were killed in return fire against US bases in neighbouring states. Iran also struck civilian infrastructure in Gulf countries, calling it retaliation for US strikes.

It remains unclear what leverage Washington can exert to break Iran's grip on the strait.

Washington and Tehran reached an agreement in June on a framework for talks meant to take place by the end of August to resolve major issues such as Iran's nuclear programme.

But they have disputed the meaning of the memorandum's language about the strait, with Washington insisting it requires Tehran to allow free travel, while Iran says it grants it the authority to supervise transit.