By Maayan Lubell and Steven Scheer

JERUSALEM, March 25 (Reuters) - Israeli Prime Minister Benjamin Netanyahu is racing to pass a state budget and stave off early elections he would likely lose, with the war in Iran so far doing little to improve his standing in the polls.

In the war's first days, Netanyahu's camp saw a chance for his right-wing coalition to capitalize on the opening salvo that killed Ayatollah Ali Khamenei by holding elections ahead of an expected October date, a source familiar with Netanyahu's political strategy said.

DUBAI, March 25 (Reuters) - Iran's initial response to the U.S. proposal to end the war has not been "positive", a senior Iranian official told Reuters on Wednesday, adding that Tehran is still reviewing it.

The official said that Tehran's initial response has been delivered to Pakistan to be conveyed to Washington.

(Writing by Parisa Hafezi)

By Maayan Lubell and Steven Scheer

JERUSALEM, March 25 (Reuters) - Israeli Prime Minister Benjamin Netanyahu is racing to pass a state budget and stave off early elections he would likely lose, with the war in Iran so far doing little to improve his standing in the polls.

In the war's first days, Netanyahu's camp saw a chance for his right-wing coalition to capitalize on the opening salvo that killed Ayatollah Ali Khamenei by holding elections ahead of an expected October date, a source familiar with Netanyahu's political strategy said.

MOSCOW, March 25 (Reuters) - Russia's state nuclear corporation Rosatom evacuated a further 163 of its staff from Iran's Bushehr nuclear power plant on Wednesday, the state-run RIA news agency reported.

It cited Rosatom chief Alexei Likhachev as saying about 300 of the company's staff remained at Bushehr, but more would be leaving.

Russia built the existing nuclear plant at Bushehr and Rosatom is constructing additional units there, although it has suspended building work since the United States and Israel launched a war with Iran last month.

NICOSIA, March 25 (Reuters) - Cyprus has initiated a discussion with London on the future of British bases on the island, its president said on Wednesday, after a drone strike on a military facility this month triggered fears their presence could expose it to the wider Iran conflict.

Cypriot politicians and legal experts have long been uneasy with the presence of the two bases on the island, among Britain's most important footholds outside of the United Kingdom and which have supported operations across the Middle East for decades.

March 25 (Reuters) - German Foreign Minister Johann Wadephul on Wednesday welcomed U.S. President Donald Trump's pursuit of negotiations to end the war with Iran and said he hoped the talks would be given a chance to succeed.

"It is commendable that the U.S. President has postponed his ultimatum to the Iranian regime for a few days and is now seeking negotiations," Wadephul said alongside his Tunisian counterpart Mohamed Ali Nafti in Berlin.

March 25 (Reuters) - Hezbollah chief Naim Qassem said on Wednesday in a televised speech read on his behalf that negotiating with Israel under fire amounts to imposed surrender and called for unity against Israel.

The speech, aired on a Hezbollah affiliated television station, said Hezbollah fighters were prepared to continue "without limits".

(Reporting by Reuters;Editing by Alison Williams)

March 25 (Reuters) - The U.S. Navy hopes to expedite the return to the Persian Gulf of two ships refitted for minesweeping now undergoing maintenance in Singapore, a senior U.S. official said on Wednesday, as concerns mount over Iranian threats to mine the Strait of Hormuz.

The official acknowledged the United States had "not a lot of options" in the Indian Ocean to maintain the two littoral combat ships based out of Bahrain, saying it hoped to minimise time spent laid up in Singapore, 6,300 km(3,915 miles) away.

KABUL/WASHINGTON, March 24 (Reuters) - The Afghan Taliban government on Tuesday released U.S. detainee Dennis Coyle after more than a year in detention, but Washington said the move was not sufficient to lift its recent designation of Kabul as a "state sponsor of wrongful detention" and called for it to take more action.

By Victoria Waldersee

MADRID, March 25 (Reuters) - Spanish Prime Minister Pedro Sanchez said on Wednesday it was unjust for citizens worldwide to bear the cost of what he called illegal U.S. and Israeli actions in Iran, warning the war was inflicting severe global economic damage, with Spanish firms alone losing 100 billion euros ($116 billion) in under a month.