Vance in Switzerland, Trump warns Iran

U.S. President Donald Trump on Sunday threatened to restart war with Iran even as Vice President JD Vance met Iranian officials for the first talks under an interim peace deal, overshadowed by Tehran's announcement it had again closed the Strait of Hormuz.

The talks in the Qatari-owned mountaintop resort of Buergenstock in Switzerland were the first to be held under the terms of a memorandum of understanding agreed a week ago.

It calls for the strait to be reopened and a halt to all hostilities, including in Lebanon, which U.S. ally Israel invaded in March. But Iran, arguing that Washington had failed to meet its commitment to halt fighting in Lebanon, said it had shut the strait again and that Sunday's talks would not cover substantive issues such as Iran's nuclear programme.

"Iran must immediately stop their highly paid PROXIES in Lebanon from causing trouble. If they don't, we'll hit Iran very hard again, just like we did last week, only harder!!!" Trump said, apparently referring to Iran's Hezbollah allies in Lebanon, and to an escalation he ordered earlier this month.

Fox News reported that Trump had gone further in an interview, saying he had told Iranian officials if they closed the strait "you won't have a country", and threatening to take over the waterway.

At the talks in Switzerland, where U.S. and Iranian officials met in the presence of Qatari mediators, Vance played down the impact of violence in Lebanon, saying progress had been made towards ending hostilities there.

"These things are always a little bit messy," he said.

Even as Trump was threatening Iran, Vance told reporters the U.S. president had "asked us to turn over a new leaf to transform our relationship with the people of Iran".

The warring sides did not pursue a joint photo opportunity at the talks. Before Vance made his remarks, Iran's Foreign Minister Abbas Araqchi briefly walked into the room and embraced Pakistani Prime Minister Shehbaz Sharif, a mediator. Araqchi did not interact with Vance, who was at the back of the room.

IRAN CITES LEBANON AS REASON TO CLOSE STRAIT

Despite the announcement of a new ceasefire in Lebanon on Friday, there has been scant sign of an end to fighting there. Iran said on Saturday that as a result, it had again shut the strait, whose closure for nearly four months caused the biggest disruption of global energy supplies in history.

U.S. officials disputed that the strait was closed, but commercially available shipping data showed an immediate impact.

Only a single small tanker crossed the waterway with its location-signalling transponders on after Iran's announcement, compared with dozens of ships in recent days when traffic had begun returning to pre-war levels.

Iran's Fars news agency cited a military source as saying on Sunday that no new permits were being issued for ships to cross until further notice. Throughout the war, shipping firms have said it is too dangerous to traverse without Iran's permission.

Iran said there could be no start to the next phase of talks, including over its nuclear programme, until Lebanon fighting ends and it gets promised economic benefits.

CLOSURE OF STRAIT COULD REVERSE FALL IN OIL PRICE

As has happened several times with major developments affecting the global economy during the war, Iran's announcement that the strait was again shut took place on the weekend with markets closed, delaying any impact on oil prices until Monday.

Trump said he agreed last week's memorandum of understanding to avert a global economic depression from high oil prices caused by the strait's closure. Oil prices had tumbled over the past week to levels unseen since the war started.

Vance said before his departure that he hoped to make progress on the nuclear issue. But after Sunday's talks, Iranian state media said Iran's nuclear programme had not been discussed.

Earlier, Iran's Foreign Ministry spokesperson Esmail Baghaei said that, since Washington had failed to guarantee a ceasefire in Lebanon, the meeting would cover only the implementation of the memorandum itself and not the substantive issues foreseen for the next stage.

QUIETER DAY IN LEBANON

The memorandum foresees 60 days of talks on issues such as curbing Iran's nuclear programme in return for the lifting of international sanctions. Before those issues are resolved, Iran expects to receive initial economic benefits, such as sanctions waivers and the unfreezing of blocked assets.

Iranian President Masoud Pezeshkian, quoted by Fars, expressed optimism that the U.S. talks could provide a strong basis for economic growth. The first goal of the negotiations was restoring access to some of Iran's frozen assets, he said.

Sunday appeared to be the quietest day in Lebanon for some time, with no reports of major violence by nightfall, after two days of heavy Israeli strikes and fire from Hezbollah fighters on Israeli positions.

More than a million people have been driven from their homes in Lebanon since March by Israel's invasion, in pursuit of Hezbollah fighters who fired across the border in March in support of Tehran.

In a potentially positive sign on Sunday, Reuters journalists in southern Lebanon saw some of the heaviest traffic since the memorandum was signed, with residents returning to homes they had fled in the south. Some stood beside cars backed up on the highway and waved Hezbollah flags.

Lebanese authorities say 20 people were killed in Israeli strikes on Saturday.

The army said on Sunday that specialised units were still working to dismantle unexploded Israeli bombs weighing 1,000 and 2,000 pounds that had been dropped on southern towns.