Trump says interim accord to end Iran war is 'over', warns of US strikes on Wednesday
By Humeyra Pamuk, Gram Slattery and Tala Ramadan
ANKARA/DUBAI, July 8 (Reuters) - President Donald Trump said an interim agreement to end the war with Iran was "over" and that the United States was likely to launch new strikes on Wednesday night following Iranian attacks on U.S. bases in the Gulf.
In a flare-up that boosted oil prices by around 7%, Iran said on Wednesday it had attacked U.S. military sites in Bahrain and Kuwait after U.S. forces struck Iranian targets in response to attacks on tankers in the Strait of Hormuz. [O/R]
The attacks rattled a shaky ceasefire agreement and dented hopes of turning the memorandum of understanding signed on June 17 into a permanent peace deal to end the war, which began with U.S.-Israeli airstrikes on Iran on February 28.
"If we make a deal with Iran I'm not sure that will stick," Trump said, "because I found them to be very dishonourable people."
But Trump said he did not expect a return to full-fledged war, and it was not immediately clear whether the negotiations on reaching a permanent deal would continue.
OIL PRICES RISE, STOCKS FALL
Asked before a NATO summit in Turkey whether the memorandum of understanding was over, Trump said: "It's a very interesting question. To me, I think it's over. I don't want to deal with them."
"As far as I'm concerned, it's just a waste of time dealing with them," he told reporters in Ankara, before adding: "Now, I'll let our wonderful negotiators keep talking if they want, but I don't see it. I don't like these people, you know that."
A source familiar with the Ankara talks said Trump did not repeat his comments about the interim deal being over when NATO leaders met, but he later warned of new strikes before a meeting with Ukrainian President Volodymyr Zelenskiy.
"I'll give a little warning: We're going to hit them hard tonight," Trump told reporters.
At a press conference later, he said he did not think the war would restart: "Anything that happens is going to be over very quickly ... and will only make it safer, including for oil."
Shipping data showed at least four oil and gas tankers had turned back rather than try to transit the Strait of Hormuz, central to global energy trade.
Iranian state media said eight Iranian service personnel had been killed in U.S. strikes on southern Iran.
Foreign Ministry spokesperson Esmaeil Baghaei said the U.S. attacks had violated the memorandum by challenging a clause that "emphasizes the Islamic Republic of Iran's responsibility in determining arrangements for the safe passage of ships through the Strait of Hormuz".
It was unclear how Iran planned to retaliate in the absence of comment from the hardline Revolutionary Guard, close to Supreme Leader Ayatollah Mojtaba Khamenei and widely believed to be decisively shaping policy since the war began.
Iranian Deputy Foreign Minister Kazem Gharibabadi said that, to be understood, Iran must speak to Trump in the language of force. Iran's Press TV cited an "informed source" as saying Iran would close the strait in the event of new U.S. attacks.
IRAN SAYS U.S. VIOLATED MEMORANDUM
A spokesperson for parliament's National Security Commission said options for retaliation included withdrawing from the nuclear Non-Proliferation Treaty (NPT), changing Iran's nuclear doctrine, and closing the Bab-el-Mandeb Strait at the mouth of the Red Sea, another crucial global shipping route.
Trump has at times stepped back from threats he has made against Iran, but oil prices jumped and global bond markets tumbled. Brent crude futures leapt 7%, the most in a day since late May, to $79.07 a barrel.
While that was far below the peaks above $120 seen at the height of the fighting, it was enough to inject fresh inflation risk into the bond market, particularly since months of conflict have drawn down global oil inventories.
Wall Street's main indexes fell. [.N]
The Revolutionary Guards (IRGC) said they had attacked U.S. military sites in Bahrain and Kuwait and shot down a U.S. MQ-9 drone attempting to interfere in the operation.
Bahrain's army later said it had thwarted Iranian attacks.
The U.S. had earlier launched strikes and revoked a licence allowing Iran to sell oil, in response to attacks on three tankers in the strait.
U.S. Central Command said more than 60 small boats used by the IRGC were among the targets hit in an operation intended to impose a heavy cost on Iran for strikes on shipping in violation of the ceasefire.
Trump said the U.S. had "knocked out 28 boats last night" and would probably hit more later.
He confirmed the U.S. had attacked Iran's main oil hub of Kharg Island and, repeating a warning that U.S. forces could take over the island, said: "They may hit it again tonight."
IRAN SEEKS TO EXPLOIT CONTROL OF STRAIT
Iran's top joint military command, Khatam al-Anbiya Central Headquarters, called the U.S. strikes a "blatant act of aggression".
Iranian media reported explosions on Kharg Island, on Qeshm Island and in the southern port cities of Sirik and Bandar Abbas.
A U.S. official told Reuters that strikes targeted Iranian air defence systems, coastal surveillance systems, surface-to-air missiles, anti-ship cruise missiles and drone launch sites.
No civilian deaths were reported in Iran.
Control of the Strait of Hormuz, which runs between Iran and Oman, has given Tehran immense leverage as it negotiates with Washington.
Under the interim U.S.-Iran agreement, the U.S. Treasury issued a general licence to allow the sale of crude oil and petrochemical and petroleum products of Iranian origin through August 21. In revoking that licence on Tuesday, it gave Iran until July 17 to wind down any transactions.
Iran's Foreign Ministry condemned the move as a breach of the framework agreement.
(Reporting by Reuters team in Tehran and Reuters bureaux; Writing by Stephen Coates and Timothy Heritage; Editing by Alex Richardson and Sanjeev Miglani)
