By Phil Stewart, Steven Scheer and Yomna Ehab
WASHINGTON/JERUSALEM/CAIRO, March 31 (Reuters) - U.S. Defense Secretary Pete Hegseth said on Tuesday the next few days in the war against Iran would be decisive and warned Tehran that the conflict would intensify if it did not make a deal.
Iran's Revolutionary Guards hit back with a new threat against U.S. companies in the region starting Wednesday. It listed 18 businesses including Microsoft, Google, Apple, Intel, IBM, Tesla and Boeing .
Hegseth, who reported he visited U.S. troops in the Middle East on Saturday, said President Donald Trump was willing to make a deal with Iran to end the war. Talks were ongoing and gaining strength, but the U.S. was prepared to continue the war if Iran did not comply, he said.
"We have more and more options, and they have less ... in only one month we set the terms, the upcoming days will be decisive," Hegseth said in Washington. "Iran knows that, and there's almost nothing they can militarily do about it."
Responding to the threat against American corporate interests, a White House official said the U.S. military was "prepared to curtail any attacks."
Iranian Foreign Minister Abbas Araqchi said on Tuesday he has been receiving direct messages from U.S. special envoy Steve Witkoff but they do not constitute "negotiations", Qatar's Al Jazeera TV cited him as saying. The messages include threats or exchanged views delivered through "friends", he added.
The month-long conflict has spread across the region, killing thousands, disrupting energy supplies and threatening to send the global economy into a tailspin.
Trump threatened on Monday to obliterate Iran's energy plants if it does not agree to a peace deal and open the Strait of Hormuz, a vital waterway for global oil shipments that has effectively been blocked by Iran.
The U.S. president on Tuesday criticised countries that have not helped the U.S. war effort, such as Britain. In a social media post, he said that in response to the global fuel shortage, these countries should buy energy from the U.S. or find "some delayed courage, go to the strait and just TAKE IT".
France and Italy have pushed back against some U.S.-Israeli military operations, sources said, highlighting how divisions between NATO allies have been exposed by the war.
Pope Leo urged Trump on Tuesday to look for an "off-ramp" to the war, in an unusual direct appeal from the pontiff to the president.
"Hopefully he's looking for a way to decrease the amount of violence," the pope told journalists outside his residence near Rome.
OIL PRICES HEAD FOR RECORD MONTHLY GAIN
Iran on Monday struck a fully loaded oil tanker off Dubai and set it ablaze. The fire was brought under control.
It was Iran's latest attack on merchant vessels in the Gulf or in the Strait of Hormuz since the United States and Israel launched the war on February 28.
Crude oil prices briefly spiked again after the attack on the tanker. Tight global supplies pushed Brent crude oil futures up a record 64% to about $118 in March.
Higher oil and fuel prices have also started to weigh on U.S. household finances and are a political headache for Trump and his Republican Party before November midterm elections.
The U.S. national average retail price of gasoline crossed $4 a gallon for the first time in over three years on Monday, data from price-tracking service GasBuddy showed.
But the Brent contract for June settled down $3.42 on Tuesday at $103.97 a barrel following unconfirmed media reports that Iran's president said the country was ready to end the war, assuming some guarantees were put in place.
Wall Street ended sharply higher on speculation about a potential de-escalation in conflict. All three major U.S. indexes rallied after the Wall Street Journal reported on Monday that Trump told aides he was willing to end the campaign even if the Strait of Hormuz remained largely closed.
INTERNATIONAL ATTEMPTS AT MEDIATION
U.S. General Dan Caine, chairman of the Joint Chiefs of Staff, told reporters in Washington that the U.S. was further degrading and destroying Iran's capabilities.
He said the U.S. military was continuing to strike key manufacturing and research sites and had taken out over 150 Iranian naval vessels. Hegseth said U.S. strikes were causing widespread desertions in Iran.
With attacks showing no sign of easing, Pakistan is seeking to mediate in the war. The foreign ministers of China and Pakistan on Tuesday called for an immediate ceasefire, urging peace talks to be held as soon as possible after they met in Beijing.
Iran has remained defiant despite heavy U.S. and Israeli attacks for the past month.
NEW ATTACKS
The Israeli military said on Tuesday it completed a wave of strikes targeting 20 weapons manufacturing sites and a research and development site in Iran.
The war has continued to spread, with Iran-aligned Houthis in Yemen entering the war by firing at Israel. Turkey reported on Monday that a ballistic missile launched from Iran had entered Turkish airspace before being shot down.
The war has also revived conflict between Israel and the Iran-backed Lebanese group Hezbollah, while Iran, which has the highest casualty toll in the war, has fired at targets in Gulf Arab states, where the U.S. has military bases.
(Reporting by reuters bureaux; Writing by Lincoln Feast, Timothy Heritage, Keith Weir and Matt Spetalnick; Editing by Michael Perry, Sharon Singleton, Alison Williams, Alexandra Hudson and Cynthia Osterman)
