By Humeyra Pamuk, Dave Graham and Tala Ramadan
BUERGENSTOCK, Switzerland/DUBAI, June 21 (Reuters) - U.S. President Donald Trump threatened to restart war with Iran on Sunday even as Vice President JD Vance met Iranian officials for the first talks under an interim peace deal that was overshadowed by Tehran's announcement it had again closed the Strait of Hormuz.
The talks in the Qatari-owned Swiss mountaintop resort of Buergenstock were the first to be held under the terms of a memorandum of understanding reached between the two enemies last week to end their war, extending a tenuous ceasefire from April for at least another 60 days.
The agreement called for reopening the strait, a choke point for global energy shipments, and ending all hostilities, including in Lebanon, where Israel has continued to launch deadly strikes as Iranian ally Hezbollah fires at Israeli targets.
Iran, arguing that the U.S. had failed to meet its commitment to halt fighting in Lebanon, said this weekend that it had again halted maritime traffic through the strait and that Sunday's talks would not cover substantive issues such as Iran's nuclear programme.
"Iran must immediately stop their highly paid PROXIES in Lebanon from causing trouble," Trump wrote on social media, apparently referring to Iran's Hezbollah allies in Lebanon. "If they don't, we'll hit Iran very hard again, just like we did last week, only harder!!!"
Fox News reported that Trump had gone further in an interview, saying he had told Iranian officials if they closed the strait, "you won't have a country", and threatening to take over the waterway.
At the talks in Switzerland, where U.S. and Iranian officials met in the presence of Qatari mediators, Vance played down the impact of violence in Lebanon, saying progress had been made towards ending hostilities there.
"These things are always a little bit messy," he said.
Even as Trump was threatening Iran, Vance told reporters the U.S. president had "asked us to turn over a new leaf to transform our relationship with the people of Iran."
The warring sides did not pursue a joint photo opportunity at the talks. Before Vance's remarks, Iran's Foreign Minister Abbas Araqchi briefly walked into the room and embraced Pakistani Prime Minister Shehbaz Sharif, a mediator. Araqchi did not interact publicly with Vance, who was at the back of the room.
Late on Sunday, a U.S. diplomat told Axios that during the talks the parties had made good progress on keeping the Strait of Hormuz open. The talks also focused on enforcing the ceasefire in Lebanon as well as the nuclear deal, the U.S. diplomat told Axios.
IRAN CITES LEBANON AS REASON TO CLOSE STRAIT
Despite the announcement of a new ceasefire in Lebanon on Friday, there has been scant sign of an end to fighting there. Iran said on Saturday that as a result, it had again shut the strait, whose closure for nearly four months caused the biggest disruption of global energy supplies in history.
U.S. officials disputed that the strait was closed, but commercially available shipping data showed an immediate impact.
Only one small tanker crossed the waterway with its location-signalling transponders on after Iran's announcement, compared with dozens of ships in recent days.
Iran's Fars news agency cited a military source as saying on Sunday that no new permits were being issued for ships to cross until further notice.
As has happened several times with major developments affecting the global economy during the war, Iran's announcement on closing the strait took place on the weekend with markets closed, delaying any impact on oil prices until Monday.
Trump said he agreed to last week's memorandum of understanding to avert a global economic depression from high oil prices caused by the strait's closure. Oil prices had tumbled over the past week to levels unseen since the war started on February 28 with U.S.-Israeli attacks on Iran.
QUIETER DAY IN LEBANON
The memorandum foresees 60 days of talks on issues such as curbing Iran's nuclear programme in return for the lifting of international sanctions. Before those issues are resolved, Iran expects to receive initial economic benefits, such as sanctions waivers and the unfreezing of blocked assets.
Iranian President Masoud Pezeshkian, quoted by Fars, expressed optimism that the U.S. talks could provide a strong basis for economic growth. The first goal of the negotiations was restoring access to some of Iran's frozen assets, he said.
Earlier, Iran's Foreign Ministry spokesperson Esmail Baghaei said that since Washington had failed to guarantee a ceasefire in Lebanon, the meeting would cover only the implementation of the memorandum itself and not the substantive issues foreseen for the next stage.
Sunday appeared to be the quietest day in Lebanon for some time, with no reports of major violence by nightfall, after two days of heavy Israeli strikes and fire from Hezbollah fighters on Israeli positions.
More than a million people have fled their homes in Lebanon since Israel invaded in March to pursue Hezbollah fighters who fired across the border in support of Tehran.
Reuters journalists in southern Lebanon saw some of the heaviest traffic since the memorandum was signed, with residents returning to their homes. Some stood beside cars backed up on the highway and waved Hezbollah flags.
(Reporting by Reuters bureaus; Writing by Peter Graff, Dave Graham, Jonathan Allen and Ann SaphirEditing by William Mallard, David Holmes, Sergio Non and Nia Williams)
