Donald Trump reverses his threat for a toll on ships in the Strait of Hormuz, as the US prepares to resume its blockade of Iran's ports
On Monday, the US president said he would impose a 20% charge on all cargo shipped through the key oil shipping route
The toll will be replaced with "trade and investment deals" with Gulf states, he now writes on Truth Social
Earlier, Iranian state media reported that explosions were heard near two Iranian port cities, Bandar Abbas and Bushehr - here's where they are on a map
It followed another night of strikes between the US and Iran, with Iran's Islamic Revolutionary Guard Corps saying it hit two UAE tankers in the Strait of Hormuz and targeted US facilities in Jordan and Bahrain
The US military said it completed strikes on targets overnight aimed at degrading "Iran's ability to attack commercial shipping" - Iranian media reports three people were killed
Image source, ReutersUS President Donald Trump is speaking with Iraqi Prime Minister Ali al-Zaidi at the White House.
We'll bring you any remarks relating to the Iran conflict. You can also watch the stream at the top of this page.
Kuwait's army says it is confronting "hostile aerial targets" in its airspace.
"Any explosion sounds, if heard, are the result of air defence systems intercepting hostile attacks," the military says on X.
The US ally has repeatedly come under attack from Iran during the ongoing conflict.
The UN's maritime agency, the International Maritime Organization (IMO), says at least two people were killed and several others were injured as a result of the overnight attacks on tankers in the Strait of Hormuz.
Earlier, the UAE and Delhi reported that an Indian seafarer had died as a result of Tehran's strikes.
Now, the IMO says a second seafarer on the same ship (Al Bahiyah) was also killed. The ship was 13 nautical miles (24 km or 14.9 miles) from the coast of Oman.
Another vessel, Mombasa B, was also damaged by Iranian strikes. Fourteen seafarers were injured during last night's attack.
In a statement to the BBC, the maritime agency says it is working with authorities to "confirm the full circumstances" and demands an end to the "cycle of escalation".
The IMO says that since the start of the US-Iran war 17 seafarers have died as a result of hostilities in the strait.
Bernd Debusmann Jr
White House reporter
Image source, EPADonald Trump's latest Truth Social post suggests that his proposed 20% fee on traffic through the Strait of Hormuz was - at least in part - a bid to secure investment in the US.
Foreign investment in the country has been a significant focus for his administration, and one that has cropped up periodically in dealings with foreign countries over the issue of tariffs.
While Trump has promised that these deals will be "massive" and will see factories and equipment pour into the US, there are very few details, and we have yet to hear from the Gulf states that he says will be involved.
The last line of his post - in which he says that Iran's days of killing protesters are "over" - is also something of a mystery.
Notably, pressure on Iran to make domestic reforms or improve its human rights records was absent from the 14-point Memorandum of Understanding that extended the ceasefire.
It is unclear how he plans to accomplish this, or pressure an Iranian regime that has survived the war largely intact despite the deaths of senior leaders.
We'll be hearing from Trump in the Oval Office shortly.
In his Truth Social post, Trump says the Strait of Hormuz is "open to ALL Ship traffic except for Iran — and that is because of their lying, violent, malicious leadership, which is taking them down the path of TOTAL DESTRUCTION".
He adds there will be a "full blockade" but only on ships "coming to and from Iranian ports, or carrying anything have to do with Iranian cargo".
Image source, EPADonald Trump says on Truth Social he has decided to "replace the 20% United States Reimbursement Fee with Trade and Investment Deals that the various Gulf States will be making into the United States".
"Those Investments will be MASSIVE but, at the same time, extraordinarily good for them, and their future," he writes on the platform.
We'll bring you further details from his post soon.
Maritime security expert Victoria Mitchell tells the BBC's World At One that the industry is making "hour by hour decisions" on when to transit to ensure safety for cargo, crew and vessels.
"Whilst it isn't that everything has stopped, certainly this most recent escalation has meant a reduction in the number of transits through the strait," Mitchell of firm Control Risks says.
With the central route closed, Mitchell says vessel owners will be talking to Iran about using their administered northern route as well as working with Oman and the US for the southern route.
She says there's "no like for like" alternative to the strait, but some states have some capacity to bypass it by using pipelines like Saudi Arabia's East-West pipeline.
"These are not able to support the same volume of oil, which was moving through the strait by seaborne routes. And they only allow for the states, Saudi Arabi, and the UAE to be using them because there's limited capacity."
The US and Iran have returned to "full-blown hostilities", according to Foad Izadi, professor of American studies at the University of Tehran.
Izadi says the memorandum of understanding (MoU) between the US and Iran was signed in a period of "distress" and that the US started violating the agreement on "day one".
"Pete Hegseth, the secretary of war, threatened to attack Iran five hours after Trump signed the agreement, which is against article one," Izadi tells the BBC World Service's Newshour.
"The United States started violating the MoU from day one, until today - when they attacked Iran last night," he says.
Izadi adds that Iran does not want to control the Srait of Hormuz, but is responding the the US's "illegal attacks" and its blockade of Iranian ports, which Izadi says "is an act of war".
Image source, Getty ImagesUK Foreign Secretary Yvette Cooper has said she's spoken with US colleagues over the UK's opposition to tolls in the Strait of Hormuz.
Speaking to the Foreign Affairs Committee, Cooper said the "discussion" took place during the Nato summit last week.
"We were talking about that we could not end up with tolls and with a system on the Strait of Hormuz that would undermine the freedom of navigation and the law of the sea."
She added she felt there's currently an "escalation of rhetoric around the conflict itself and the putting on of pressure".
Cooper also blamed Iran for "an increasing of pressure on all sides" by attacking commercial shipping in the southern shipping route in Omani waters, saying the move "totally undermines the law of the sea".
Bernd Debusmann Jr
White House reporter
US President Donald Trump is scheduled to meet with new Iraqi Prime Minister Ali al-Zaidi at the White House in a few hour's time - a meeting in which the issue of Iran is likely to dominate discussions.
Trump publicly supported al-Zaidi to become Iraq's new PM after months of political deadlock following the country's parliamentary elections last year, and in April posted that his success was the "beginning of a tremendous new chapter" in US-Iraqi relations.
The US president is likely to use the meeting to push al-Zaidi to move to disarm Iranian-backed and affiliated militia groups.
While Iraq's government has given non-state armed groups until September to give up their weapons, several of them have said they won't, and experts have warned that government operations against them could lead to fighting.
According to US officials, these groups have attacked US diplomatic and military personnel and facilities more than 600 times, including drone attacks on the American embassy and military airfields.
This, in turn, has prompted US retaliatory operations against militia leaders and bases.
Image source, ReutersIsrael's Prime Minister Benjamin Netanyahu says Israeli retaliation against Iran will be "much more powerful" if it is attacked first.
"I will say it to the leaders of Iran: Do not count on things remaining quiet if you attack us," he says in a video published on his social media.
He warns that Israel's response will not be the same at the last time it was attacked by Iran, even though that was "already powerful enough".
"The days are over when someone strikes us and we don't strike them back twofold," he adds.
"We did this to the Axis of Evil in Iran, and we will continue to do so to anyone who harms us. That is what we do."
Nick Edser
Business reporter
While higher oil prices might be the most visible impact on the financial markets from the resumption in hostilities in the Middle East, there are other knock-on effects too.
The cost of borrowing for governments has been rising on worries that higher energy costs will increase inflation, which will lead central banks to raise interest rates to keep price rises under control.
In the UK, government borrowing costs have risen above 5% for the first time since May.
The 10-year bond yield - effectively the interest rate charged to the UK government for a 10-year loan - hit 5.04% on Tuesday morning before slipping back. In May, the rate had peaked at 5.17%, which was the highest level since 2008.
The UK is not alone in seeing higher borrowing costs, as bond yields for other European countries have also risen. However, the UK has often seen a bigger impact than elsewhere, which analysts put down to a more inflation-prone economy, together with speculation earlier this year over the leadership of the government.
The trend could be a problem for Andy Burnham, who is set to replace Sir Keir Starmer as prime minister on 20 July. Rising yields on bonds mean the government will have to spend more on interest payments.
The UK government is talking to the Trump administration about its plans to impose 20% tolls on all cargo through the Strait of Hormuz - something the UK is opposed to.
The prime minister's official spokeswoman says the "priority is stability and a return to the ceasefire between the US and Iran and we continue to work with our allies to support a long-lasting peace deal".
Toll-free navigation of the vital waterway "must now be restored to begin easing the severe economic impacts" felt across the UK and the world, she adds.
On whether the UK is making these representations to the Trump administration, the spokesperson says that "it's for the US to set out the exact details of the proposals".
The government is "in touch with the US as you would expect, as we always are, on official channels, diplomatic channels to find out the intended scope of it and those conversations are happening", she says.
She adds: "We have always said the Strait of Hormuz should be reopened in line with international law and without tolls or charges that could further disrupt global trade."
Frank Gardner
Security correspondent
Image source, ReutersAlthough totally outmatched by the US militarily, Iran is achieving some strategic advantage over its adversary.
It’s doing this by yet again making the Strait of Hormuz a dangerous place to transit - unless ships abide by its new rules and sail by the northern route, to be inspected and then possibly having to pay a fee.
At the same time Iran is meting out nightly punishment to America’s Arab allies in the region for hosting its bases. Iran seems to have no shortage of drones and missiles to fire at them.
A renewed US naval blockade will hurt Iran’s already struggling economy.
But Iran knows that a paralysed strait will also impact the rest of the world, with oil price hikes as well as Donald Trump’s fortunes at the mid-term elections in less than four months’ time.
For those just joining us, here's a summary of the latest developments:
Image source, Getty ImagesThe European Union Aviation Safety Agency (EASA) is warning airlines against operating within the airspace of Bahrain, Kuwait, Qatar, the UAE, and over the waters of the Gulf of Oman.
It says "unpredictable military developments, combined with the possible use of missiles, drones, combat aircraft and air-defence systems" within the region have created a "high risk" to flights.
The latest advisory is valid until 29 July, the EASA says, adding it will closely monitor the situation.
Iranian state media have reported explosions near the city of Mahshahr, as well as Abadan, in south-west Iran.
Fars news agency cited comments from Valiollah Hayati, the deputy security governor of Khuzestan province.
Local media earlier reported US strikes hit the port city of Bushehr, which hosts the country's only civilian nuclear power plant.
Deputy provincial governor Ehsan Jahanian said four points in the city were hit "by enemy projectiles", according to state-run IRNA. Jahanian said the strikes took place "in different areas" of the city.
Jakob Larsen was a commander in the Danish Navy and has experience in the Gulf
Some ships may be prepared to take the risk of going through the Strait of Hormuz "because the rewards are also very high", according to a safety and security expert.
Jakob Larsen is chief safety and security officer at the Baltic and International Maritime Council and he tells BBC News that security risks for ships "have gone up dramatically".
But while many owners "are now rethinking their decision to transit the Strait", Larsen - who was also a commander in the Danish Navy and has experience in the Gulf - says some ship bosses and crews will be talking about making the journey.
"Some crews are willing to take risks because they are also rewarded," he says.
"At the end of the day, when the risk goes up, there are more and more ships that back down and will decide not to go through."
Frank Gardner
Security correspondent
Image source, ReutersA British expatriate resident in Bahrain has described to me the terror of living through successive nights of Iranian missile and drone attacks, close to residential areas in the tiny Gulf island state.
He speaks of "huge bangs" and the "closest attack interception yet, a few hundred feet above me with the debris falling in the sea in front of the flats".
"It was so loud I am still trembling," he says.
He also describes "a big fireball" as one of the intercepted missiles fell into the sea close to him, and seeing "three cruise missiles heading toward Juffair [the US naval base]".
The expat says much of the damage to military facilities claimed by Iran is exaggerated, with the majority of Iranian munitions successfully intercepted by Bahrain’s air defence teams.
But residential apartment blocks have suffered significant blast damage and from falling debris.
This morning he texted me to say: "Have just been hit by five huge explosions. Had glass from the window blow out and flying glass cut my leg. Just a few pieces. Nothing serious."
On 17 June, the US and Iran agreed a plan to bring an end to the conflict, with a 14-point agreement that included safe passage through the Strait of Hormuz, an extension to the ceasefire and an end to a naval blockade.
A lot has changed between then and now, here's a recap:
On 8 July President Trump said the ceasefire was over and called Iranian leaders 'scum'
