President Donald Trump said on Thursday he was “very optimistic” about a deal with Iran, despite ongoing Israeli strikes in Lebanon and the continued closure of the Strait of Hormuz jeopardizing efforts to secure a diplomatic resolution to the war.

Trump described Iran’s leaders as “much more reasonable” than their public comments would suggest in a phone interview with NBC News. The U.S. president also said Prime Minister Benjamin Netanyahu was “going to low-key it” with Israeli strikes on Tehran-backed Hezbollah militants in Lebanon, after the two leaders spoke by phone on Wednesday.

Netanyahu’s decision to open direct talks with Lebanon pushed oil prices down on Thursday afternoon, as the U.S. agreed to host a meeting next week to discuss ongoing ceasefire negotiations with Israel and Lebanon, according to a State Department official. But the Israeli leader also reiterated his position that ongoing attacks in Lebanon were not part of the U.S.-Iran ceasefire deal announced on Tuesday.

The Strait of Hormuz — which Trump has repeatedly insisted Iran reopen — remains effectively shut, as shipowners await clarification on the status of the key waterway. Traffic is still a fraction of pre-war levels, despite state media reporting that Iran’s Ports and Maritime Organization published two safe routes for shipping.

Iran’s new supreme leader, Mojtaba Khamenei, whose father was killed in the early days of the war launched by the U.S. and Israel, also repeated demands for war reparations — a likely nonstarter for U.S. negotiators. Khamenei also said in a statement on Telegram that Iran “will definitely bring the management of the Strait of Hormuz to a new stage,” though it was unclear if he was referring to past Iranian demands to retain control of the waterway that the U.S. has rejected.

The geopolitical developments on Thursday sowed new doubts about the prospects of securing a long-term deal to end a war that has engulfed the Middle East.

The U.S. and Iran appeared to pause most strikes after fighting continued in the region on Wednesday after the ceasefire was announced on Tuesday evening. But on Thursday evening, Kuwait’s army said the country’s air defenses were responding to hostile attacks from drones on some key facilities, although it didn’t specify the source of the drones.

Vice President JD Vance is expected to lead the U.S. delegation in discussions scheduled for Islamabad on Saturday, with Iranian officials due to arrive in the Pakistani capital on Thursday.

Yet Israel’s ongoing campaign against Tehran-aligned Hezbollah risks undermining the negotiations. Iranian President Masoud Pezeshkian said Israel’s strikes in Lebanon are a “clear violation” of the ceasefire and “will render negotiations meaningless.”

Israel’s military on Thursday told residents in eight Beirut neighborhoods to leave ahead of strikes, after a major operation that killed more than 300 people the previous day.

Trump vowed to keep troops in the Persian Gulf ahead of the talks in Pakistan, “until such time as the REAL AGREEMENT reached is fully complied with.” He added that the Strait of Hormuz would soon be open and safe to use.

Iran effectively shut down Hormuz — through which roughly a fifth of the world’s oil and liquefied natural gas typically flows — after the U.S. and Israel began airstrikes on Feb. 28. Control over the waterway, and safe passage for tankers, will be a major focus of talks as fears linger of a global energy supply crisis.

Oil prices jumped towards the end of the session on news that Saudi Arabia’s production capacity was cut by more than half a million barrels a day due to a spate of attacks on energy facilities. Prices were choppy throughout the session and U.S. crude for May rose nearly 4% to end the session close to $98 a barrel while Brent crude for June settled near $96 a barrel.

Major U.S. stock indexes were firmly in the green Thursday despite some swings, on hopes that the ceasefire deal will hold. The S&P 500 rose for a seventh straight session, the longest advance since October. However, equities across Europe and Asia closed the day largely lower.

With only sporadic attacks reported in Iran and across the Middle East, the international focus shifted to a bit toward Lebanon, where Israel revived its campaign against Hezbollah after the militant group started firing rockets across the Israel-Lebanon border at the start of the war.

The two sides previously engaged in a full-blown conflict for about two months in 2024 before a tentative ceasefire in November of that year. The Lebanese government has pledged to disarm Hezbollah, but hasn’t succeeded — with the powerful group refusing.

Vance said Israel had agreed to “check themselves a little bit in Lebanon” to support negotiations. Hezbollah said it fired rockets toward Israel in response to Wednesday’s assault.

The European Union’s top diplomat, Kaja Kallas, said Israel’s right to defend itself doesn’t justify “inflicting such massive destruction in Lebanon,” warning the offensive is hurting peace talks.

The war in the Middle East has claimed more than 5,500 lives, according to governments and non-governmental agencies. More than 3,600 people have been killed in Iran, the U.S.-based Human Rights Activists News Agency estimates, while more than 1,700 people have died in Lebanon, the government says.

Israel said it’s killed more than 1,400 Hezbollah militants, including 200 on Wednesday.

Israel has reported about three dozen deaths, and a similar number have been killed across the Gulf Arab nations, government reports show. There have also been several dozen casualties in Iraq. Thirteen American troops have been killed, according to U.S. Central Command.

A big stumbling block to any peace talks remains the status of the Strait of Hormuz. Only three ships were observed leaving the region on Wednesday, ship-tracking data compiled by Bloomberg shows. In normal times, about 135 vessels cross daily.

Iran’s safe routes in Hormuz were established to avoid the potential presence of mines in the primary traffic lanes and all ships are asked to coordinate with the Islamic Revolutionary Guard Corps until further notice, state-run Nour News reported.

More than 800 freighters are stuck inside the Persian Gulf, mostly waiting to leave, and owners and insurer groups have warned that more details will be needed to determine if safe transit is possible.

Trump has made conflicting claims about a possible peace deal, including suggesting a joint U.S.-Iran toll system for ships in Hormuz. His press secretary, Karoline Leavitt, said that proposal hadn’t been accepted.

Trump also said Iran had undergone a “regime change,” even though there have been no signs this week that new leadership had taken hold. He indicated the U.S. would use its 15-point plan as the basis of negotiations with Tehran, while remaining open to sanctions relief.

Iran’s demands include its continued control of Hormuz, acceptance of its nuclear-enrichment activities, the lifting of all primary and secondary sanctions, and a withdrawal of U.S. combat forces from the region, according to a statement by its Supreme National Security Council carried by state media.

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With assistance from Devika Krishna Kumar.

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