By Humeyra Pamuk, Dave Graham and Tala Ramadan
BUERGENSTOCK, Switzerland/DUBAI, June 21 (Reuters) - U.S. Vice President JD Vance led talks at a Swiss resort on Sunday to shore up a tentative peace deal with Iran, but the diplomacy was clouded by Iran's announcement it had closed the Strait of Hormuz over Washington's failure to halt fighting in Lebanon.
A memorandum of understanding on a path to end the war, agreed a week ago, calls for the Strait to be reopened and a halt to all hostilities, including in Lebanon, which Washington's ally Israel invaded in March.
But with little sign of an end to fighting there, Iran said on Saturday it had shut the waterway again.
U.S. officials have disputed the Strait is closed and said 55 merchant ships crossed it on Saturday. Yet on Sunday Iran's Fars news agency cited a military source as saying no new permits were being issued for ships to cross until further notice.
Vessel tracking data showing ships actively transmitting positions broadly backs Iran's claim the Strait is closed, with no tanker crossings recorded since Tehran announced the move on Saturday afternoon.
Iran's Tasnim news agency, citing a source close to the negotiating team, reported that the Strait would not be reopened until a ceasefire in Lebanon was respected.
The source said the waterway would also remain closed until waivers allowing the sale of Iranian oil were issued.
RENEWED BLOCKADE COULD SEE OIL PRICES SURGE AGAIN
As is often the case with major developments potentially affecting the global economy during the war, the announcement that the Strait was again shut occurred at the weekend with markets closed, making it difficult to assess the impact.
U.S. President Donald Trump said he agreed last week's memorandum of understanding to avert a global depression from high oil prices caused by shutting the Strait.
Since the agreement was announced, oil prices have tumbled to levels unseen since the war started, but a return of Iran's effective blockade could see them surge again on Monday.
Iran's foreign ministry spokesperson, Esmail Baghaei, said Sunday's talks in the scenic Qatari-owned Swiss mountain resort of Buergenstock, involving mediators Qatar and Pakistan as well as Iran and the United States, would last for just one day.
Since Washington had failed to guarantee a ceasefire in Lebanon, the talks would cover only the implementation of the memorandum itself and not the substantive issues foreseen for the next stage of negotiations, Baghaei said.
Qatari foreign ministry spokesperson Majed Al Ansari told Qatar News Agency that specialized technical and follow-up groups have been formed to negotiate the terms of the final agreement covering all aspects of the memorandum.
VANCE HOPES FOR PROGRESS
The memorandum of understanding foresees 60 days of talks on issues such as curbing Iran's nuclear programme in return for the lifting of international sanctions. Iran is already expected to receive initial economic benefits, such as sanctions waivers and the unfreezing of blocked assets.
Vance headed the U.S. delegation opposite Iran's parliament speaker, Mohammed Baqer Qalibaf. They previously met at the only known face-to-face talks so far, more than two months ago.
"I think we're going to hopefully make progress on the nuclear issue, make progress on the Lebanon ceasefire issue," with a "couple days of talks" likely, Vance told reporters at Joint Base Andrews in Maryland before departing.
On Saturday, Iran's Revolutionary Guards, accusing Israel of "crimes" in Lebanon that violated U.S. commitments to the ceasefire, said ships would be at risk if they approached the Strait, which carried a fifth of global oil supplies before the U.S. and Israel launched attacks on Iran on February 28.
Ceasefires have been repeatedly announced in Lebanon, most recently on Friday, but appear to have had little impact so far on the fighting there, with more than a million people driven from their homes by Israel's invasion.
AUTHORITIES SAY 20 KILLED IN LEBANON ON SATURDAY
Reuters journalists in southern Lebanon saw rescuers on Saturday carrying wounded at the sites of Israeli attacks, which have reduced swathes of Lebanese towns and villages to ruins of concrete rubble that residents say resemble the Gaza Strip. Lebanese authorities say 20 people were killed on Saturday.
The army said on Sunday that specialised units were still working to dismantle unexploded Israeli bombs weighing 1,000 and 2,000 pounds that had been dropped on southern towns. The army had opened some roads, but urged residents to delay returning to border villages and to follow instructions from soldiers to ensure safety amid ongoing Israeli attacks.
Trump's memorandum to end the war, which he launched with Israeli Prime Minister Benjamin Netanyahu, is deeply unpopular in Israel, which did not participate in the peace talks.
Netanyahu's government says it will not withdraw from a swathe of Lebanon it seized after Hezbollah fighters fired across the border into Israel in solidarity with Tehran.
The Iranian delegation at the talks includes Foreign Minister Abbas Araqchi as well as senior security, central bank and oil officials, Iranian media said.
In addition to Vance, the U.S. negotiating team includes envoys Steve Witkoff and Jared Kushner, Trump's son-in-law.
NONE OF WAR OBJECTIVES ACHIEVED
Pakistan said its Prime Minister Shehbaz Sharif and the army chief, Field Marshal Syed Asim Munir, had arrived to join the talks at the resort, where helicopters hovered overhead.
Vance briefly appeared in front of travelling media as he, Witkoff and Kushner met Sharif and Munir.
Warm greetings were exchanged, and Vance said "What's up man?" as he shook hands with Munir and hugged him. "My brother," Munir said as he reached out to Witkoff and embraced him.
In an interview with Fox News before leaving the United States, Vance said he was confident the ceasefire would hold and he had seen no evidence of the Strait of Hormuz being closed.
After Trump and Netanyahu launched the war, they said their aims were to destroy Iran's nuclear programme, halt its ability to threaten neighbours with missiles and proxy forces, and make it possible for Iranians to topple the government.
None of those objectives has been achieved, although U.S. officials say they severely damaged Iran's military and still expect a strong agreement that will prevent Iran from obtaining a nuclear weapon.
A poll by Israel's Hebrew University, provided to Reuters, showed about 92% of Israelis believe Iran benefited more than Israel from the joint Israeli-U.S. military campaign, while just 8% see Israel as having emerged victorious.
Almost 90% of Israelis said war goals had not been met and fewer than 30% believe Netanyahu's claims of major achievements.
(Reporting by Reuters bureaus; Writing by William Maclean, John Kruzel, Clarence Fernandez and Peter Graff; Editing by William Mallard and David Holmes)
