By Parisa Hafezi, John Irish and Susan Heavey
DUBAI/WASHINGTON, June 11 (Reuters) - President Donald Trump said on Thursday the United States would hit Iran "very hard tonight" and wanted at some point to take Iran's oil infrastructure hub Kharg Island, after tit-for-tat strikes in the Gulf undermined a shaky ceasefire.
Iranian sources and Western officials said indirect U.S.-Iranian talks on a preliminary peace deal had intensified. But a worsening of hostilities this week has undermined prospects for a swift end to more than three months of war.
TRUMP'S WARNING
Trump threatened new strikes on Iran after the two sides traded air attacks on Thursday for the second successive day.
"The United States will be hitting Iran (Whose Navy, Air Force, Radar, Anti Aircraft, and all other forms of Defense, together with most its offensive capability, are GONE!), VERY HARD TONIGHT," Trump said in a social media post.
"At some point in the not too distant future, we will be taking Kharg Island, and other oil infrastructure points, and assume total control of their Oil and Gas Markets," he said, referring to Iran's main oil hub.
Iran exports most of its oil via Kharg Island with volumes usually amounting to 2 million barrels per day, or around 2% of global supply, and flowing mainly to China.
Tehran did not immediately respond to Trump's latest remarks but Iran's foreign ministry said earlier on Thursday that the ceasefire agreed in early April had been effectively rendered meaningless by the latest U.S. attacks.
The war has killed thousands of people, mainly in Iran and Lebanon, and pushed up global oil prices since the U.S. and Israel launched heavy airstrikes on Iran on February 28.
Oil prices were, however, almost flat on Thursday as investors weighed Trump's comments with the actual impact of supply disruptions from the war.
A move to capture Kharg Island would not have an immediate impact on oil shipments because flows have been suspended in recent weeks following a U.S. blockade of Iranian oil exports - imposed after Iran effectively blocked the Strait of Hormuz, a vital artery for oil and liquefied natural gas.
'INTENSIFIED TALKS'
Despite the latest hostilities, three Iranian sources and Western officials said U.S.-Iranian talks had intensified, with some issues yet to be discussed in detail, including a mechanism for the release of billions of dollars in frozen Iranian funds.
"This war, from a military standpoint, is a dead end. The Americans could not achieve their goals by attacking Iran. There has been progress in negotiations," said one of the Iranian sources.
Iran wants its funds abroad to be unfrozen and released directly to Tehran, while Washington wants to release funds in stages for humanitarian goods, the sources said.
Tehran's demands also include an end to Israeli attacks in Lebanon following cross-border strikes by Iran-aligned Hezbollah militants, the lifting of sanctions on Iran and recognition of its control of the Strait of Hormuz.
Trump says Iran must end restrictions on shipping through the strait and that any peace deal must ensure Iran cannot develop a nuclear weapon. Iran denies any such ambition.
Trump has repeatedly said a deal is close, and, reflecting the view that military action has become part of the tense negotiations, U.S. Defense Secretary Pete Hegseth said on Wednesday: "If we need to negotiate with bombs, we'll negotiate with bombs, and we're very good at it."
Trump confirmed to Fox News on Thursday that the U.S. was still talking with Iran to reach a deal.
"We are talking to them and all, but you know, look, my preference has always been - take Kharg Island ... my preference would be that. I don't know that America has the stomach for it," he said, warning of "bigger, more powerful" bombing.
TIT-FOR-TAT STRIKES
In the tit-for-tat attacks before Trump's latest comments, the U.S. struck targets across Iran on Thursday and Tehran fired at U.S. bases in the region following Monday's downing of a U.S. Apache helicopter near the Strait of Hormuz.
Iranian news agencies reported explosions in several cities and said five people were hurt.
Iran's Islamic Revolutionary Guard Corps said it had fired at U.S. military targets at airbases in Kuwait, Jordan and Bahrain, and attacked the U.S. Navy's Fifth Fleet in Bahrain.
An 11-year-old girl suffered minor injuries in Bahrain, and Kuwait briefly closed its airspace because of an Iranian attack.
INDIAN SAILORS KILLED
Trump had told Fox News reporter Trey Yingst on Wednesday he would resume heavy bombing if Iran's leaders did not sign an agreement with the U.S. immediately.
Yingst also quoted Trump as saying he had spoken "directly with Iranian officials ... who asked him to stop bombing". Iranian officials who spoke to Reuters denied this.
Polls show Trump's approval ratings sinking amid voter anger over high gasoline prices, and some Republicans worry that the war's unpopularity could cost them control of Congress in November's midterm elections.
In another headache for Washington, India demanded an end to attacks on Indian ships after the deaths of three Indian sailors in a U.S. military strike on a tanker off Oman as part of Washington’s efforts to blockade Iran-linked shipping.
The U.S. Navy has attacked three ships with Indian crews this week, Indian foreign ministry spokesperson Randhir Jaiswal told reporters.
(Reporting by Reuters bureaus; Writing by Lincoln Feast and Timothy Heritage; Editing by Clarence Fernandez, Toby Chopra and William Maclean)
