US eyes Iranian assets for Gulf allies’ reconstruction, source says

[WASHINGTON/DUBAI] The US government will attempt to redirect Iranian assets to Gulf states for rebuilding and repairs of future damage caused by Iran, a source familiar with the matter said on Saturday (Jun 6), a day after a wave of attacks by Iran against Kuwait and Bahrain.

US Treasury Secretary Scott Bessent has also directed a team to assess costs for damage already inflicted on Gulf allies by Iran, the source said, adding that the US will consider using Iranian assets for those repairs as well.

The disclosure came a day after Mohsen Rezaei, an adviser to Iran’s supreme leader, told CNN that a peace deal hinged on the release of US$24 billion in Iranian assets frozen by the US.

The source on Saturday did not specify what kind of assets the Treasury was examining. The language used to describe the new measures did not appear limited to frozen assets.

Peace negotiations appear to have stalled, although a minister from mediator Pakistan traveled to Teheran on Saturday with a letter for Iran’s Supreme Leader Mojtaba Khamenei, Iran’s semi-official ISNA news agency reported.

The threatened redirection of Iranian assets could create a new irritant to a fragile ceasefire between the US and Iran, which was tested again this weekend with strikes by the US and Iran.

US forces struck Iranian coastal radar sites in Goruk and Qeshm Island, both in the Strait of Hormuz, early on Saturday after shooting down drones launched by Iran that US Central Command says posed a threat to maritime traffic.

Iran’s Revolutionary Guard said it retaliated against US bases in Kuwait and Bahrain, and Kuwait’s army said on Saturday it engaged seven ballistic missiles that passed over residential areas, resulting in material damage but no casualties.

In Bahrain, sirens sounded and residents were urged to seek shelter. Kuwait and Bahrain condemned the strikes.

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Iran later said it had hit US bases in both countries with ballistic missiles, but the US military said six missiles were intercepted and a seventh did not reach its target.

The US and Iran have been engaged in largely indirect negotiations for an interim deal to halt the three-month-old war that would leave issues including Iran’s nuclear programme to further negotiations.

But a deal has remained elusive while the two sides have periodically skirmished.

Teheran wants access to billions of dollars in oil revenue, waivers on sanctions on crude exports, the lifting of a US blockade on its ports and leverage over the Strait of Hormuz. Iran has effectively blocked the waterway, where about a fifth of global oil traffic transited before the war.

Iranian state media reported that Pakistani Interior Minister Mohsin Naqvi arrived in Teheran on Saturday for talks with Iranian officials, including Foreign Minister Abbas Araqhchi. Naqvi said he was carrying a “special letter” from his country’s army chief and prime minister to Iran’s Khamenei, ISNA reported.

Trump is facing mounting domestic political pressure due to rising gas prices to bring the unpopular war to an end. He told NBC that while most of Iran’s drone and missile manufacturing facilities had been destroyed, the Iranians still had access to about a fifth of their missiles.

“They have some missiles, they have some drones. I would say percentage wise, maybe 21 per cent to 22 per cent of their missiles. It’s a lot of missiles, but it’s not what it was when we first attacked,” Trump told NBC News’ “Meet the Press” programme, according to excerpts released by the network on Friday.

After the US and Israel launched the war against Iran on Feb 28, Teheran attacked Gulf states hosting US bases and largely stopped shipping through the Strait of Hormuz. The conflict has driven up oil prices and disrupted supply chains for other goods, including humanitarian aid.

Fighting flares across region despite ceasefires

In a parallel conflict in Lebanon, two Lebanese army officers and a soldier were killed in an Israeli strike on a military vehicle in south Lebanon, the Lebanese army said. The Israeli military said it was investigating the incident. Iran has made a ceasefire in Lebanon between Israel and Iran-aligned Hizbollah a condition for any peace deal with Washington.

Lebanon’s army said on Saturday its commander, General Rudolf Haykal, left for Pakistan at the invitation of his Pakistani counterpart, without giving further details. The surprise visit was notable given the insistence by Washington – and by Lebanese leaders, including the president – that ceasefire talks for Lebanon remain separate from US-Iran negotiations mediated by Pakistan.

Hizbollah leader Naim Qassem on Jun 5 rejected a US-brokered pact between Israel and the Lebanese government to halt the fighting in Lebanon. The deal did not provide for an Israeli withdrawal and Hizbollah had not been party to the negotiations. Israel has said its forces would not withdraw or halt operations in the country amid increasing friction with the US. REUTERS