US-Iran nuclear talks stall over Lebanon before they begin

TEHRAN - Iran delayed the start of negotiations over a permanent peace deal with the US after fighting intensified in southern Lebanon, a potential setback to US President Donald Trump’s efforts to end the war and curb Tehran’s nuclear programme.

The talks, which were meant to take place in Switzerland on June 19, were pushed off because of those clashes between Israel and Iran-backed Hezbollah militants, according to two people familiar with the situation, who asked not to be identified due to the sensitivity of the matter.

Israel and Hezbollah agreed to a ceasefire later on June 19, according to a US official, who asked to remain anonymous because the agreement is not public. Both sides said they would commit to a truce if the other side did the same, but would respond otherwise.

Iran insisted on a ceasefire in Lebanon as part of the interim peace deal finalised with the US this week, and did not send a delegation to the talks as a result of the fresh hostilities. While US Vice-President J.D. Vance, who was to represent Washington, also did not travel, Axios reported that US special envoy Steve Witkoff is headed to Switzerland.

There is as yet no indication of a new start date for the discussions.

The postponement represents a blow to Trump, who signed a memorandum of understanding with Iran on June 17 despite widespread criticism that he was conceding too much in terms of financial benefits and relief from sanctions. He said the agreement would prevent a global economic crisis, given that the critical Strait of Hormuz would reopen to oil and gas shipments.

“We didn’t meet out of desperation, Iran did. They are Finished!” Trump posted on Truth Social on June 19. “We’ll play out the 60 days. They get no money, not ten cents!”

Later on June 19, he said the two sides still have time to make a deal.

“Otherwise, we will do things that won’t make them happy, but I don’t think it’s going to get to that,” he said in remarks at Joint Base Andrews, where he was unveiling the new Qatar-gifted jet that will serve as Air Force One. “I think it’s going to be very good.”

It is not yet clear if the latest developments will affect the strait, where maritime activity has picked up since Trump and Iranian counterpart Masoud Pezeshkian signed the agreement. Traffic through the waterway – critical for global energy supplies – appeared to thin early on June 19, a day after a surge in renewed oil flows as the two countries vowed to lift a dual blockade.

Iran said on June 19 that ships that cross the Strait of Hormuz will need its permission, setting the stage for a likely contentious debate over future tolling arrangements.

Vessels that cross the strait will need a mandatory insurance policy that is currently free but could have a cost in the future, the country’s Persian Gulf Strait Authority said in a document on its website.

The US, Europe and Gulf Arab states have balked at the idea of Iran imposing fees on the transit point, and Vance downplayed the possibility on June 18.

“We believe international waterways should be free of tolls,” he said, noting that the countries in the region “together will figure out a proper security framework for the strait in the future”.

Oil rose slightly on June 19, with Brent up about 0.9 per cent to US$80 per barrel. Prices have still dropped about 7.7 per cent this week, with traders anticipating that the reopening of the Hormuz Strait will ease the biggest energy supply crunch in history.

The fighting in Lebanon was deadlier than usual, with the Israeli military saying four of its soldiers were killed, including a battalion commander. Israel’s attacks killed 18 people, Lebanon’s state-run National News Agency reported, while the Israeli military said it targeted 80 Hezbollah sites.

The news agency said more Israeli strikes on June 20 around the south Lebanese town of Nabatieh killed five people.

Iran sees the US as having “direct responsibility” for the situation in Lebanon and Israel’s military actions, Foreign Ministry spokesman Esmail Baghaei said in a statement cited by state-run Islamic Republic News Agency.

Strains between the US and Israel over Lebanon are growing.

Trump has sworn at Israeli Prime Minister Benjamin Netanyahu in calls, accusing him of almost scuppering this week’s memorandum with Iran by escalating strikes in Lebanon. Israel insists it will keep troops across its borders until it is sure that Hezbollah, designated a terrorist organisation by the US, is no longer a threat.

Trump told Axios in an interview taped on June 18 that aired on June 19 that he has a good relationship with Netanyahu, but that he has to “keep him a little bit sane”.

He added that he can prevent Israel from attacking Lebanon because “they have a lot of respect for me, and they do as I say”.

Israel will not tolerate attacks on its soldiers or territory, and will exact a “very heavy price” from Hezbollah in response, Netanyahu said in a post on social media platform X on June 19.

“Israel will remain in the security zone in southern Lebanon for as long as required to protect the communities in the north,” he said.

Sixty-seven per cent of Israelis believe the US-Iran deal is bad for their country, according to a poll aired on Israel’s top-rated Channel 12 TV. Nine per cent believe it is good for Israel, and 24 per cent are undecided.

Lebanese President Joseph Aoun said the latest Israeli escalation is undermining the ceasefire efforts.

Switzerland’s Foreign Ministry said it “remains ready to facilitate these talks”, and that “the relevant preparatory work” at the host resort of Burgenstock is continuing.

A White House spokesperson said an American delegation is prepared to depart at the first available opportunity.

The US-Iran memorandum signed on June 17 has led to Washington lifting a naval blockade of Iranian ports and Iran saying it will reopen the Strait of Hormuz.

They have agreed to extend their ceasefire during the new round of talks, which are meant to finish within 60 days but can be extended.

The sides will try to agree on restricting Iran’s processing of uranium, possibly for a decade or more, and destroying or diluting its existing stocks of highly enriched uranium.

The US and Israel started bombing Iran on Feb 28, saying they needed to stop the country from building an atomic weapon. Tehran has long denied wanting to do that but has enriched uranium to far beyond the levels needed for nuclear power plants.

The war caused energy prices to soar and pushed up inflation globally, while US allies such as the United Arab Emirates and Qatar were targeted with thousands of Iranian drones and missiles.

Many atomic experts say 60 days will not be enough to work out a permanent deal with Iran, given the complex and technical nature of the topic.

A 2015 nuclear accord between Iran and world powers – including the US, which Trump regularly derides and abandoned during his first term – took about two years to complete.

Crude prices remain roughly 30 per cent higher for the year because it will take months, if not longer, for oil and liquefied natural gas flows through Hormuz to return to normal.

Moreover, the US and many other countries have run down emergency petroleum stockpiles at a record rate to keep a lid on prices during the war. Those will have to be replenished, which will add to global demand. BLOOMBERG