Washington and Tehran open direct talks

U.S. and Iranian negotiators held their highest-level talks in half a century in Pakistan on Saturday to try to end their six-week war as President Donald Trump said his military was clearing the Strait of Hormuz.

The waterway, a major transit point for global energy supplies that Iran has effectively blocked but Trump has vowed to reopen, is crucial to negotiations between the sides during a ceasefire agreed last Tuesday and due to last two weeks.

"We're now starting the process of clearing out the Strait of Hormuz as a favor to Countries all over the World," Trump posted on social media, adding that Iranian mine-dropping vessels had been sunk.

The U.S. military said two of its warships had passed through the strait and conditions were being set to clear mines, while Iran's state media denied any U.S. ships had transited the waterway.

The talks in Islamabad were the first direct U.S.-Iranian meeting in more than a decade and the highest-level discussions since the 1979 Islamic Revolution.

U.S. Vice President JD Vance, special envoy Steve Witkoff and Trump's son-in-law Jared Kushner flew in on Saturday and met Iranian Parliamentary Speaker Mohammad Baqer Qalibaf and Foreign Minister Abbas Araqchi for two hours before a rest, according to a source from mediator Pakistan.

The Iranian delegation had arrived on Friday dressed in black in mourning for Supreme Leader Ayatollah Ali Khamenei and others killed in the war. They carried shoes and bags of some students killed during the U.S. bombing of a school next to a military compound, the Iranian government said.

"There were mood swings from the two sides and the temperature went up and down during the meeting," said another Pakistani source of the first round of talks.

Iran's state-affiliated Nournews said talks would resume later on Saturday night or Sunday.

DIFFERENT DEMANDS

The war has sent global oil prices soaring, killed thousands of people and seen strikes on Gulf Arab states.

Before the talks began, a senior Iranian source told Reuters the U.S. had agreed to release frozen assets in Qatar and other foreign banks. But a U.S. official denied that.

As well as release of assets abroad, Tehran is demanding control of the Strait of Hormuz, payment of war reparations and a ceasefire across the region including in Lebanon, according to Iranian state TV and officials.

Trump's stated goals have varied during the campaign, but as a minimum he wants free passage for global shipping through the strait and the crippling of Iran's nuclear enrichment programme to ensure it cannot produce an atomic bomb.

U.S. ally Israel, which joined the February 28 attacks on Iran that launched the war, has also been bombing Tehran-backed Hezbollah militants in Lebanon and says that conflict is not part of the Iran-U.S. ceasefire.

Mutual distrust is high.

"We will negotiate with our finger on the trigger," Iranian government spokesperson Fatemeh Mohajerani said on state TV.

"While we are open to talks, we are also fully aware of the lack of trust; therefore, Iran's diplomatic team is entering this process with maximum caution."

Tehran's agenda nL6N40U01E includes aiming to collect transit fees in the Strait of Hormuz, a chokepoint for about 20% of global oil and liquefied natural gas shipments.

The biggest ever disruption there has fed inflation and slowed the global economy, with an impact expected to last for months even if negotiators succeed in reopening the strait.

Nevertheless, three Liberian- and Chinese-flagged supertankers did pass through the strait on Saturday, shipping data showed, marking what appeared to be the first vessels to exit the Gulf nL1N40U04R since the ceasefire.

DOZENS DEAD IN LEBANON

More than 90 people were killed in Israeli air strikes across Lebanon on Saturday, the Lebanese health ministry said, bringing the war's death toll to 2,020 people, including 165 children, nearly 250 women and 85 medics.

Hezbollah said it had conducted several military operations against Israeli positions on Saturday, both within Lebanese territory and in northern Israel.

Israeli and Lebanese officials plan talks in the U.S. on Tuesday.

For the U.S.-Iran talks, Islamabad, a city of just over 2 million people, was locked down with thousands of paramilitary personnel and army troops on the streets.

Pakistan's mediating role is a remarkable transformation nL4N40J13V for a nation that was a diplomatic outcast a year ago.

"This was a world war that Pakistan stopped. It played a big role and we should appreciate it," said dry cleaner Nasir Khan Abbasi at a market in Islamabad. "I really like this and I feel great that Pakistan's name is shining in the world."