US President Donald Trump on Tuesday reimposed a naval blockade of all Iranian ports and threatened to hit power plants and bridges next week unless Tehran resumes negotiations, in the latest US escalation of the conflict.

The US also began a fresh round of strikes "to continue degrading Iranian capabilities used to attack commercial shipping in the Strait of Hormuz," the US military said.

Tehran says it has again closed the strait after hostilities between Iran and the US reignited last week, fraying an already fragile truce reached in June after several months of fighting that has killed thousands.

"I'll save the energy targets for last, but ultimately we'll hit energy targets," Trump told Fox News in an interview that aired Tuesday night on 'Special Report with Bret Baier'.

"Next week comes the power plants, next week comes the bridges," Trump said, "unless they get to the table and negotiate."

US negotiators had been in touch with their Iranian counterparts to tell them "you better make a deal", he added.

Iran's army said early on Wednesday that it had launched drone attacks against US positions at Jordan's Azraq base. There was no immediate comment from the Pentagon.

Iran's Islamic Revolutionary Guard Corps said they targeted weapons and storage facilities in Bahrain and Kuwait.

The flare-up over the last few days has heightened doubts that a memorandum of understanding signed last month would lead to a permanent halt in the war, which has engulfed Iran's neighbours and disrupted global energy supplies.

American projectiles hit a location around Bandar Abbas, an Iranian city on the strait, the governor's office told state media late on Tuesday, while Iran's state news agency IRNA said that US projectiles hit an area near Sirik in southern Iran.

"If the U.S. thinks that by tightening its measures against us, its military actions and its economic blockade, we will return to negotiations, it is making a mistake," Iran's Deputy Foreign Minister Kazem Gharibabadi said in an earlier interview with state television.

Before the war began in February, about a fifth of global oil and gas shipments passed through the Strait of Hormuz each day.

Trump on Monday floated the idea of a 20-percent fee on shipping through the strait, which drew sharp criticism from the UN shipping agency and others.

On Tuesday, he scrapped the idea and said, without providing details, that he would instead seek investment deals with Gulf states.

Trump said certain countries, without naming them, had told him they wanted to invest in the US instead of being charged a transit fee.

It was not immediately clear what Gulf states had agreed to, if anything, and he did not mention any specific investment commitments.

The naval blockade against vessels transiting to and from Iranian ports and coastal areas came back into effect at 2000 GMT, after being lifted in June.

Trump said the strait was open to all shipping traffic except that of Iran. There are currently more than 20 US Navy warships and hundreds of military aircraft operating across the region, the US military said.

The conflict has proved unpopular in the US, where gasoline prices have risen and congressional elections are looming in November.

The price of benchmark Brent crude oil is up 15 percent over the last seven days to US$85 a barrel, highest since mid-June. (Reuters)



Edited by Cecil Wong