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US eyes Iranian assets for Gulf allies' reconstruction, source says - Headlines news and analysis from Global Banking & Finance Review
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US eyes Iranian assets for Gulf allies' reconstruction, source says

Published by Global Banking & Finance Review

Posted on June 6, 2026

5 min read

· Last updated: June 7, 2026

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Trump says he will press Israel to hold back after Iran retaliates for Beirut attack

Main Developments in the Israel-Iran-Lebanon Conflict

By Alexander Cornwell, Parisa Hafezi and Bo Erickson

BEIRUT/DUBAI/NEW BRUNSWICK, New Jersey, June 7 (Reuters) - U.S. President Donald Trump said on Sunday he would tell Israeli Prime Minister Benjamin Netanyahu not to strike back after Iran fired a salvo of missiles at Israeli targets in retaliation for an attack on the outskirts of Beirut, news outlet Axios reported.

Background to the Recent Escalation

Iran has long said any peace deal with the U.S. would depend on a ceasefire also holding in Lebanon, which Israel invaded in March in pursuit of Iran-backed Hezbollah fighters who fired rockets and drones across the border in solidarity with Tehran.

But Israel earlier on Sunday launched strikes in the Beirut area for the first time since the U.S. announced a truce plan for Lebanon last week.

Details of the Missile Exchange

Iran's Revolutionary Guards said they had targeted Ramat David air base, near Nazareth. The Israeli military said it identified missiles launched from Iran and that its defense systems had intercepted them. 

Trump, who was spending the weekend at his golf club in Bedminster, New Jersey, and Netanyahu spoke by phone for a little less than half an hour, an Israeli official said, without giving further details. The White House and the Israeli prime minister's office did not immediately respond to requests for comment. 

Trump’s Position on Retaliation

Earlier, Trump told news outlet Axios he would press Netanyahu not to retaliate.

“Israel had its strike and Iran had its strike. We don't need another one,” Trump said. "We are very close to a final deal with Iran. It is going to be a good deal. I don’t want it to blow up because of what is happening now.”

Israel would retaliate, said an Israeli source, speaking to Reuters on the condition of anonymity following the Iranian attack. 

Shortly after midnight local time, the Israeli military issued a brief statement, citing Chief of Staff Eyal Zamir as saying his forces had not been directed to attack Iran so far, but would do so "with determination" once given the order.

Ongoing U.S.-Iran Negotiations and Regional Tensions

Since the start of U.S.-Iran talks aimed at halting the war, Israel has continued attacks in Lebanon in a conflict with Hezbollah that Israeli officials insist should be treated separately from any ceasefire with Iran. Tehran demands that a peace deal with the United States include Lebanon, warning that Israeli attacks there were jeopardizing talks. 

Iran's chief peace negotiator, parliamentary speaker Mohammed Baqer Qalibaf, said U.S. bases and Israeli assets are legitimate targets because of hostile acts, including the "violation of agreements over Lebanon."

Before Sunday, Iran had not targeted Israel since a ceasefire in the wider war started in April, although Hezbollah has done so. 

Trump has repeatedly insisted that Washington and Tehran were close to an agreement on ending the war.

"We're very close to a deal, or I'm going to blow the hell out of them," Trump told NBC News' "Meet the Press" in a prerecorded interview that aired on Sunday to mark 100 days of the conflict.

Trump’s Approach to Lebanon

TRUMP WANTS NO ATTACKS IN LEBANON

Trump has leaned on Israel to stop its attacks in Lebanon to allow room for a peace deal with Iran, including rebuking Netanyahu with obscenities in a phone call last week. After that call, Netanyahu appeared to abandon plans to strike Beirut.

But Israel has never fully halted its Lebanon campaign, which has killed thousands of people and driven hundreds of thousands from their homes. Hezbollah, which did not take part in the truce talks, has also continued its attacks and says it will not give up its weapons unless Israel halts its attacks and withdraws from Lebanon.

Israeli Strikes and Regional Impact

Netanyahu said the Israeli strikes on Sunday on Beirut's southern outskirts, a district known as Dahiyeh that has long been a Hezbollah stronghold, were ordered in response to Hezbollah firing toward Israel.

The wider war has been stalemated since the U.S. and Israel paused their attacks on Iran in early April, with Tehran blocking most shipping through the Strait of Hormuz, the main transit route for Middle East oil. Washington has imposed its own blockade of Iranian ports.

Though Washington and Tehran have said they are close to a preliminary agreement that would reopen the strait, they have repeatedly traded strikes, with escalations in recent days that have included attacks on nearby Arab states hosting U.S. bases.

Key Issues in the Peace Negotiations

Trump has said any agreement to end the war must prevent Iran from developing a nuclear weapon, and he is under pressure to deliver terms tougher than those agreed in 2015 under then-President Barack Obama in a deal Trump later repudiated.

Tehran's demands include the lifting of U.S. and international sanctions, recognition of its sway over the strait and the release of billions of dollars in frozen assets.

Disputes Over Iranian Assets

A source familiar with U.S. plans told Reuters on Saturday that Washington could make Iranian assets available to Gulf neighbors to repair damage inflicted by Iran.

Iran's Deputy Foreign Minister Kazem Gharibabadi said on Sunday any such diversion of Iranian assets would be illegal, and Tehran would take measures in response.

Political Reactions and Future Outlook

Netanyahu was criticized last week by political rivals over a new ceasefire in Lebanon ahead of this year's national election.

(Reporting by Reuters bureaus; Writing by Peter Graff and Kristina Cooke; Editing by William Maclean, Mark Potter, Nick Zieminski and Paul Simao)

Key Takeaways

  • Treasury Secretary Scott Bessent has tasked a team with evaluating both past damages and future reconstruction needs in Gulf states, to be potentially funded by Iranian assets (investing.com).
  • A senior Iranian adviser tied progress in peace talks to the release of $24 billion in frozen assets, framing it as a trust-building measure—though U.S. officials have not confirmed any agreement to unfreeze funds (jpost.com).
  • The proposal comes amid renewed hostilities, with U.S. strikes on Iranian radar sites and Iranian missile attacks on Gulf states, further complicating an already fragile ceasefire and peace efforts (defensenews.com).

References

Frequently Asked Questions

Why is the US considering redirecting Iranian assets?
The US aims to use Iranian assets to compensate Gulf allies for damage resulting from recent Iranian attacks and to deter future incidents.
What types of Iranian assets is the US examining?
A source said the US Treasury has not specified which assets are under review, but the action may extend beyond just frozen assets.
How might redirection of assets affect US-Iran relations?
Redirecting Iranian assets could escalate tensions and impact ongoing peace negotiations between the US and Iran.
What triggered these latest US discussions about Iranian assets?
Recent attacks by Iran on Kuwait and Bahrain have led the US to reevaluate using frozen or other Iranian assets for Gulf states' reconstruction.
Is there any progress in US-Iran peace negotiations?
Peace talks have stalled despite ongoing indirect negotiations and mediation efforts involving Pakistan.

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