Iran’s Islamic Revolutionary Guard Corps (IRGC) said the United States and Israel must eventually accept a Middle East free of their presence, while Washington said the door remained open to negotiations with Tehran.
The IRGC said its forces were ready to respond to further aggression, according to Iranian state media. The comments came as US officials maintained that President Donald Trump remained determined to prevent Iran from acquiring a nuclear weapon while leaving open the possibility of renewed negotiations.
US envoy to the United Nations Mike Waltz said Trump was determined to ensure Iran never acquired a nuclear weapon and that the door remained open for Tehran to return to the negotiating table if it did so in good faith.
The comments came as Iran’s economy showed signs of the impact of the conflict, with official data showing a sharp contraction in gross domestic product during the first quarter of the Persian calendar.
Iran GDP shrinks 10.1% during war
Iran’s GDP shrank 10.1% year-on-year between March 21 and June 20, according to the Statistical Center of Iran, covering the opening months of the war that began on February 28.
The contraction was particularly severe in the oil and gas sector, a critical source of foreign currency for Iran, as the country struggled to maintain oil exports amid increased US economic and military pressure.
The economy has also been hit by high inflation, a weakening rial and disruptions to trade and industry.
The data underline the economic costs of the conflict for Iran as Tehran faces restrictions on oil exports and continued pressure on its economy.
G7 urges Iran to halt Houthi support
The Group of Seven foreign ministers called on Iran to end its military support for Yemen’s Houthis, saying such assistance represented a dangerous escalation that threatened international trade and global stability.
In a statement issued after a meeting on the sidelines of the United Nations General Assembly, the ministers condemned Houthi strikes in Yemen and attacks against Saudi Arabia.
The G7 called on the Houthis to halt military actions and attacks against civilian shipping and return to a political process in good faith.
The statement adds to international pressure on Tehran over its regional alliances as the conflict continues to affect shipping routes and energy markets.
Diplomacy remains possible
Iranian Foreign Minister Abbas Araghchi discussed the agenda of the UN General Assembly and international peace and security with UN Secretary-General Antonio Guterres after arriving in New York, according to semi-official Tasnim news agency.
The call came as the possibility of US-Iran contacts during the UN General Assembly remained a focus for markets and governments.
Waltz’s comments suggested Washington had not closed the diplomatic channel, although the US position remained centred on preventing Iran from acquiring a nuclear weapon.
Iran has continued to face pressure over the Strait of Hormuz, a key route for global energy shipments.
Hormuz disruption weighs on trade and oil
Iraqi Prime Minister Ali al-Zaidi said Iran had not allowed Iraqi tankers to pass through the Strait of Hormuz, with Iraq losing about $60 billion in revenue since the war began.
He said the disruption represented about 60% of Iraq’s monthly export revenue.
The United Kingdom Maritime Trade Operations agency also reported that a second vessel had been hit by debris from an unknown projectile in the Strait of Hormuz.
Oil prices were meanwhile slightly higher as traders monitored potential US-Iran diplomatic developments at the UN General Assembly.
Brent crude futures for November rose 22 cents, or 0.22%, to $100.57 a barrel at 0021 GMT, according to Reuters. October West Texas Intermediate futures gained 2 cents to $95.80, while the more actively traded November contract rose 13 cents to $92.49.
US faces criticism over war costs
The conflict has also drawn criticism in Washington.
US Senator Mark Warner said the war had lasted more than six months and argued that American households had borne higher costs as a result.
Warner said Americans had paid an additional $100 billion for gas and diesel and at least another $60 billion for essentials including groceries and mortgages. Those figures were presented by Warner in a social media post.
Another US senator, Chris Van Hollen, called on European countries and other members of the International Criminal Court to sanction Trump and Secretary of State Marco Rubio over what he described as efforts to obstruct investigations into alleged war crimes.
The comments followed media reports that the White House was preparing financial restrictions targeting the ICC.
Regional pressure widens
French President Emmanuel Macron said after meeting Trump in New York that the two countries would work together to ease tensions in energy markets, protect critical infrastructure in the Middle East and safeguard freedom of navigation through the Strait of Hormuz.
Macron said they would also seek a moratorium on strikes against energy infrastructure.
In Iraq, Rubio met Prime Minister Ali al-Zaidi and discussed dismantling armed groups, preventing attacks from Iraqi territory and strengthening Iraqi sovereignty. Al-Zaidi said earlier that the deadline for armed factions to disarm had been pushed back to June 30, 2027.
The developments came as the wider conflict continued to affect Iran’s regional relationships, energy supplies and diplomatic position.
The IRGC’s warning that Washington and Israel would ultimately have to accept a region without their presence contrasted with the US position that negotiations remained possible if Iran returned to talks in good faith.
The economic data, shipping disruptions and diplomatic activity show the conflict’s effects extending beyond the battlefield, while the positions of Tehran and Washington remain sharply divided over Iran’s nuclear programme and the future of the region.
