By Yomna Ehab and Enas Alashray

CAIRO, July 23 (Reuters) - The Iranian-aligned Houthis on Thursday claimed military strikes on two Saudi oil tankers as part of a naval blockade on Saudi Arabia, advancing toward a second chokehold on world oil supplies at the Red Sea in coordination with Iran's attempt to control the Strait of Hormuz.

Meanwhile the U.S. military said on Wednesday it launched a new round of strikes on Iran at President Donald Trump's direction, marking a 12th successive night of American attacks.

Oil prices surged past $100 a barrel on Thursday as Iran-backed Houthi rebels targeted Red Sea shipping as threats by US President Donald Trump to strike them in return sent equity markets slumping.

The international benchmark Brent North Sea oil contract soared seven percent to over the symbolic $100 a barrel level, as the attacks potentially opened a new front in the Middle East war and Trump threatened the Houthis with "major military punishment."

By Jarrett Renshaw and Idrees Ali

DOVER AIR FORCE BASE, Delaware, July 22 (Reuters) - U.S. President Donald Trump attended a ceremony at Dover Air Force Base in Delaware for four U.S. service members who returned to American soil in flag-draped caskets on Wednesday after being killed in Iranian attacks in the Middle East.

The ceremony, known as a "dignified transfer" of the bodies, comes amid growing frustration with the U.S.-Israeli war with Iran.

US President Donald Trump said on Thursday that a deal with Saudi Arabia to establish a civilian nuclear programme would be contingent on the kingdom's recognition of Israel, a move long sought by Washington but resisted by Riyadh.

The announcements came as the United States fights a war with Iran that began in large part over concerns about Tehran's nuclear programme.

DUBAI, July 22 (Reuters) - The Trump administration backs a nuclear energy pact with Riyadh allowing Saudi Arabiato enrich uranium and process spent atomic fuel, a move that worries some U.S. lawmakers and regional states concerned about weapons proliferation.

Here are some of the main issues at play:

WHAT HAS HAPPENED SO FAR?

Washington and Riyadh have for years been discussing a nuclear cooperation deal that would give Saudi Arabia access to U.S. technology and American companies a chance to win big contracts for Saudi atomic energy facilities.

(In paragraph 11, corrects first name of Harvard Law School professor to Alex, not Alexander)

By Luc Cohen

NEW YORK, July 22 (Reuters) - New York City Mayor Zohran Mamdani said this week that he had determined he lacked the legal authority to have Israeli Prime Minister Benjamin Netanyahu arrested for alleged war crimes should he visit the largest U.S. city, after earlier saying he was considering the move.

By Idrees Ali and Phil Stewart

WASHINGTON, July 22 (Reuters) - A Houthi threat to impose a naval blockade against Saudi Arabia in the Red Sea could significantly widen the Iran war and strain a U.S. military already focused on stopping Tehran's attacks across the region, current and former U.S. officials said.

Yemen's Iran-aligned Houthis said on Monday they ​would not allow ships to load or unload at Saudi ports, potentially blocking Saudi oil exports and choking off an additional 7% of global oil supply.

By Andrea Shalal

WASHINGTON, July 22 (Reuters) - U.S. Treasury Secretary Scott Bessent met Pakistan's finance minister, Muhammad Aurangzeb, on Tuesday and welcomed the country's progress in implementing economic reforms and laying the groundwork for a return to international capital markets, Treasury said in a statement on Wednesday.

The statement did not address Pakistan's request for a $10 billion exchange stabilization facility, first reported by Reuters.

MANILA/BEIJING, July 22 (Reuters) - The foreign ministers of the Philippines and China met in Manila on Wednesday and both made "strong" protests over an encounter between the two countries' vessels this week in contested South China Sea waters.