US seizes Iranian cargo ship as ceasefire strains, Tehran rejects new talks

Concerns mounted on Monday over the durability of a fragile ceasefire between the United States and Iran after Washington said it had seized an Iranian cargo ship accused of attempting to breach a US blockade, prompting Tehran to threaten retaliation. The developments cast doubt on efforts to extend the truce, which is set to expire on Tuesday, and raised uncertainty over planned negotiations.

The US military said it fired on an Iranian-flagged vessel as it approached Iran’s Bandar Abbas port, later taking full control of the ship. President Donald Trump confirmed the seizure in a social media post, stating, "We have full custody of their ship and are seeing what's on board!" Iran’s military said the vessel had been traveling from China and condemned the incident, warning that “the armed forces of the Islamic Republic of Iran will soon respond and retaliate against this armed piracy by the US military,” according to state media.

The maritime confrontation comes amid ongoing blockades by both sides. The US has maintained restrictions on Iranian ports, while Iran has intermittently imposed its own limits on shipping through the Strait of Hormuz, a critical waterway that typically handles about one-fifth of global oil supply. The escalation has unsettled markets, with oil prices rising and stock markets showing volatility as traders assess the risk of prolonged disruption in the Gulf.

Diplomatic efforts to stabilize the situation also appeared to falter. Iranian state media reported that Tehran had rejected a proposed second round of peace talks, citing the continued blockade and what it described as Washington’s “excessive demands.” Iran’s First Vice President Mohammad Reza Aref wrote, “One cannot restrict Iran's oil exports while expecting free security for others. The choice is clear: either a free oil market for all or the risk of significant costs for everyone.”

Trump had earlier warned that the US would target Iran’s infrastructure if Tehran refused his terms, stating Washington could destroy “every bridge and power plant in Iran.” Iranian officials have responded by warning that any such action would lead to strikes on power and desalination facilities in Gulf Arab states.

Preparations for talks continued despite uncertainty over whether they would take place. US envoys were expected to arrive in Islamabad ahead of the ceasefire deadline, although Trump indicated that Vice President JD Vance, who led initial negotiations, would not attend. A White House official had earlier said the delegation would include Steve Witkoff and Jared Kushner. Pakistani authorities were reportedly making arrangements, with US military transport aircraft delivering security equipment in advance.

With both sides maintaining hardline positions and the ceasefire nearing its end, the prospects for de-escalation remain uncertain.