US President Donald Trump has said "very friendly negotiations" are under way with Iran, as the two sides went a third consecutive day without exchanging strikes. The apparent lull comes after nearly two weeks of daily US strikes and retaliatory Iranian attacks that had unravelled a ceasefire agreed in June, and any de-escalation would matter significantly given the toll on both military personnel and global oil markets. Iran has, however, denied that direct negotiations are taking place, leaving the true state of diplomacy unclear.

Trump said he had paused strikes on Friday at the request of mediating countries, with Iran also halting its attacks, but warned the US would resume operations if talks failed. Oil prices fell more than 9% to $87.59 a barrel on Monday amid hopes of de-escalation. Trump also rejected reports of dwindling US ammunition stocks, saying supplies remained plentiful and that Patriot missile systems were being built up further, a claim echoed by the White House. The conflict, which began on 28 February with US and Israeli strikes on Iran, has since killed four American soldiers and, according to Iran's health ministry, dozens of Iranians, with more than 600 US service members injured.