The Iran-backed Hezbollah militia rejected a new ceasefire in Lebanon on Thursday and Israel said it would not withdraw troops from the country, undermining US President Donald Trump's efforts to halt fighting there to forge peace with Tehran.

Iran has made a ceasefire in Lebanon a condition for any peace deal with Washington, and has suggested in recent days that it could intervene directly if Israel keeps up attacks there.

However, Hezbollah leader Naim Qassem rejected a US-brokered agreement between Israel and the Lebanese government to halt the fighting.

Hezbollah had not been party to the negotiations.

Israel kept up strikes in southern Lebanon, and Defence Minister Israel Katz said Israeli forces would not be withdrawing from the area or halting operations in the country, which they invaded in March in parallel with the war in Iran.

The commander of Iran's Revolutionary Guards Quds Force – which established Hezbollah in 1982 – said Israel must at a minimum withdraw to positions it held before the war began.

Along with Lebanon, residents of Gaza, northern Israel and Kuwait have all been under fire this week, despite US-arranged ceasefires that are supposedly in force.

Trump said on Wednesday that the agreements involved "shooting in a more moderate manner," rather than a total halt in fighting.

Iranian and US forces traded attacks in the Gulf on Wednesday in one of the most intense bouts of fighting since early April, when a ceasefire halted large-scale hostilities.

Iranian oil exports have fallen to their lowest level in six years, according to shipping data, but global oil prices fell by about 3 percent on hopes that the Lebanon ceasefire could help Washington and Iran find a diplomatic off-ramp from their war.

There has been little evidence of diplomatic progress, though Trump has repeatedly declared since late March that a deal is close.

Iran's Supreme Leader Ayatollah Mojtaba Khamenei said on Thursday that Iran's enemies had already been defeated on the battlefield and were now seeking to sow internal divisions.

Khamenei has not been seen in public since he succeeded his father, who was killed in an air strike at the start of the war.

Tehran wants access to billions of US dollars in oil revenue, waivers on sanctions on crude exports, a lifting of a US blockade on its ports and leverage over the strait.

Trump has said his top priority is to stop Iran from acquiring nuclear weapons. Iran says its atomic programme is for peaceful purposes.

The UN nuclear watchdog said on Thursday that it found Iran's nuclear programme to be largely unchanged despite three months of war. (Reuters)



Edited by Cecil Wong