A new exchange of fire with Iran in the Gulf tests the fragile ceasefire

Iran’s attack comes hours after the U.S. military shot down multiple drones initially planned for the Strait of Hormuz.

CAIRO — Iran fired ballistic missiles and drones toward Bahrain and Kuwait that were intercepted early Saturday, Bahrain’s government said, and called on Tehran to halt attacks on Gulf neighbours that test a fragile ceasefire in the Middle East conflict.

Iran said that it targeted American military assets in both countries, after the U.S. attacked surveillance facilities on Qeshm Island and near Sirik that Iran said were used to protect borders and “ensure the security of navigation in international waters.” Tehran called the attack a ceasefire violation.

The latest exchange of fire came as the U.S. President Donald Trump’s administration presses Iran to make a deal to end the war, which has strained the global economy and threatened a hunger crisis in some of the world’s most vulnerable countries.

Pakistan’s interior minister, Mohsin Naqvi, arrived in Iran on Saturday as part of mediation efforts.

Meanwhile, the U.S. is seeking to ratchet up economic pressure on Iran. The U.S. Treasury Department is considering allowing Gulf allies to tap into frozen Iranian assets to pay for damages they sustained in the war, according to a person familiar with Secretary Scott Bessent’s thinking who spoke Saturday on condition of anonymity to share internal deliberations.

Iran says it targeted U.S. air base and Navy

The U.S. military said it shot down several Iranian missiles and drones launched toward the Strait of Hormuz and Gulf Arab allies, and struck some of the Islamic Republic’s coastal surveillance radar sites in response.

“The attack drones posed an immediate threat to regional maritime traffic,” U.S. Central Command said.

Iran’s Revolutionary Guard said it had targeted the Ali Al Salem air base, which hosts U.S. forces in Kuwait, and the U.S. Navy’s 5th Fleet in Bahrain, according to the state-run IRNA news agency.

The U.S. military said there were no reports of harm to U.S. personnel.

Earlier in the week, Iranian drones heavily damaged a passenger terminal at Kuwait’s main airport, killing one person and wounding dozens.

• READ MORE: Kuwait says Iranian drones hit airport and killed 1 as ceasefire is tested again

The U.S. military kept up its blockade on Iranian ports in response to Tehran’s grip on the strait, a crucial corridor for global oil and natural gas shipments. Energy prices have spiked, posing political problems for U.S. President Donald Trump’s Republican Party before the midterm congressional election.

Deals remain elusive

Trump increasingly appears to be boxed in. U.S. and Iranian negotiators reached a tentative agreement a week ago to extend the ceasefire by 60 days and start a new round of talks on Iran’s nuclear program. Trump, however, has called for unspecified changes, and Iranian officials have shown no public sign of agreeing to the deal.

The fighting in Lebanon, where Israeli forces have seized large swaths of the south while saying it targets the Iranian-backed Hezbollah militant group, also challenges efforts to end the Iran war and reopen the Strait of Hormuz. Iran has demanded that any lasting truce extends to Lebanon.

• READ MORE: Israel strikes southern Lebanon after evacuation warnings to several villages

The Trump administration has touted the latest ceasefire agreed to earlier in the week by the Lebanese government and Israel after U.S.-brokered talks in Washington. However, Hezbollah has rejected the agreement.

Ratcheting up financial pressure

Miad Maleki, a senior fellow at the Foundation for Defense of Democracies and former Iranian sanctions expert at the Treasury Department, said it’s significant that the U.S. is signaling it could allow Gulf countries to access some of the US$24 billion in frozen Iranian assets stored abroad.

Iran had been seeking some of the funds as part of a deal, and rather than offering Tehran that concession, the U.S. is pressuring them to move quickly.

“So the U.S. government is saying: ’Hey, not just that we’re not going to give you these funds. As a matter of fact, we’re going to take these funds from you, and we’re going to help Gulf states to take it,” Maleki said.

Allowing Gulf states to use the frozen assets would also bolster U.S. ties there, he said. It would send a clear signal that America is sticking with its partners as they’ve sustained attacks and repercussions from the war.

However, Maleki said some Gulf states may be reluctant to use the funds out of concern that they could face retaliation from Iran for doing so.

Samy Magdy And Michelle L. Price, The Associated Press

Michelle L. Price reported from Bridgewater, New Jersey. Munir Ahmed contributed to this report from Islamabad.