Middle East Tensions Escalate as Iran Halts All Peace Talks with US

JAKARTA, CNBC Indonesia – Iran has suspended all peace talks with the United States (US) through mediators on Monday, June 1, 2026, according to Iranian news agency Tasnim. The two sides remain at odds over a deal to end the Middle East conflict, particularly regarding Israeli violations in Lebanon and recent US strikes.

‘Iran’s negotiation team has suspended dialogue and text exchanges via mediators, given the ongoing crimes by the Zionist regime (Israel) in Lebanon and the fact that Lebanon is a prerequisite for a ceasefire, which has now been breached across all fronts, including Lebanon,’ the Iranian government stated, as reported by AFP.

Oil prices surged by 5% following the announcement, while Wall Street markets plummeted with the Dow Jones falling 0.4%, the S&P 500 down 0.2%, and the Nasdaq Composite slipping 0.1%.

The ceasefire between the two nations was already fragile. Over the weekend, the US and Iran exchanged attacks. The US military said it conducted ‘defensive strikes’ against Iranian radar and drone control sites, marking the third such strike in over a week, in response to the downing of a US MQ-1 drone. Shortly after, Iran’s Revolutionary Guard Corps (IRGC) stated they targeted a US military airbase used for the attacks. Kuwaiti military confirmed its air defences intercepted ‘enemy missile and drone attacks’.

Meanwhile, Israel launched a ground assault into Lebanon, raising its flag at Beaufort Castle, a medieval fortress. Prime Minister Netanyahu called the recapture ‘a dramatic shift’ and pledged to continue fighting Hezbollah with deeper incursions into Lebanon. On Monday, Israeli Defence Forces warned residents of Beirut’s southern Dahiyeh district to evacuate ahead of imminent strikes, stating that if Hezbollah continued rocket attacks on Israeli cities, IDF would target positions in southern Dahiyeh.