Iran, US escalate in Gulf but release of American signals path to climb down

Iran and the US exchanged intensified fire on Thursday in a week-long escalation that has all but torn up last month's truce, but Iran's release of a US citizen was seen as signalling a path to avert the resumption of all-out war.

For the first time since a memorandum of understanding paused fighting last month, the US launched two big waves of air strikes in one day on Wednesday, mostly on targets near the coast in southern Iran.

Iran responded with missiles and drones fired at US military bases in neighbouring countries, including a major barrage at a recently expanded air base in Jordan.

The week of increasingly intense fire has tested the limits of escalation that both sides set during four months of fighting before last month's truce. But in the midst of the attacks, US President Donald Trump hailed the release of a US citizen in Iran as a "gesture of goodwill".

Human rights ​lawyer Jared Genser identified her as Dena Karari, who he said had been "trapped in Iran since December 2024 on bogus charges" and was "now ​safe and travelling back to the United States". 

Over decades of confrontation, the release of US citizens held in Iran has been managed through behind-the-scenes contacts that persisted when formal diplomacy was cut off.

SHIPPING HALTED AGAIN

The re-escalation has once again nearly halted traffic through the Strait of Hormuz, the world's most important shipping route for oil and gas, sending global energy prices shooting higher. But prices are still well below wartime peaks, suggesting traders anticipate the crisis could abate.

Iran triggered the renewed fighting last week by striking ships using a corridor in the strait outside its control, including a drone attack that caused a dangerous fire on board a Qatari tanker filled with liquefied natural gas.

Trump has declared the ceasefire under the memorandum "over".

For now, Iran's retaliatory strikes have been focused on US bases in neighbouring countries. Iran said on Thursday it had targeted US bases in Kuwait and Jordan, including an air base in Jordan that Washington has upgraded in recent years into a regional headquarters.

It said the Jordanian base had been used to launch attacks on Iran, including one that struck a target in the city of Ahvaz, causing damage to a nearby children's cancer hospital that had to be evacuated.