Unofficial U.S.-Iran ceasefire holds for third straight day but Tehran denies sides are talking

A woman walks past a large billboard pledging revenge against U.S. President Donald Trump in central Tehran on July 27, 2026. Photo by AFP via Getty Images

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U.S. President Donald Trump on Monday voiced optimism at the prospects for a negotiated peace deal with Iran, as the two sides held their fire for a third consecutive day.

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Fighting between the longtime foes has been paused since Friday after 13 nights of renewed U.S. strikes on the Islamic republic sparked by a breakdown in diplomacy over Iran’s blockade of the Strait of Hormuz.

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But the U.S. leader expressed hope that renewed diplomacy could bring an end to the war that began in late February with a wave of U.S.-Israeli strikes, rattling both the region and the global economy.

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“I have a lot of patience… We’ll see what happens,” he said aboard Air Force One. “I think there is a good chance that something could happen.”

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Tehran had earlier denied that there were any talks with the U.S. to end the conflict.

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“Mediators may convey messages from the American side to us regarding current developments in the region. But at present, we are not engaged in any negotiations with the United States,” said Iranian foreign ministry spokesman Esmaeil Baqaei.

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But Trump insisted during a speech in Michigan that “right now, they’re talking to us about making a deal”.

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Aboard Air Force One, the U.S. president had earlier said that if the new efforts failed, “we go back to doing what we were doing” before the pause in fighting.

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On that subject, he dismissed concerns that U.S. ammunition stockpiles were running low nearly five months after the war began.

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“We have a lot of ammunition. We have a lot of the mid-level stuff too, more than we could ever use no matter what,” he said.

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Despite the recent lull, Saudi Arabia came under attack on Monday, with its defence ministry saying it had intercepted several drones fired by Iran-linked groups in Iraq targeting oil facilities.

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No group claimed responsibility, but Riyadh called on Baghdad to prevent such attacks from being launched from its territory.

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Iraqi Prime Minister Ali al-Zaidi later called for an investigation into Saudi Arabia’s allegations.

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Pakistan, which has been mediating a resolution to the Middle East war, condemned the drone attacks, saying they “pose a grave threat to peace and stability” in the Middle East.

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Yemen’s Iran-backed Houthi rebels also said they launched drone attacks on Saudi Arabian oil infrastructure in response to incursions by the kingdom’s drones. Riyadh is yet to comment on the claim.

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Saudi Arabia and other Gulf nations accused pro-Iran militias in Iraq of launching waves of attacks on their territory during the conflict’s earlier phase, but the groups have not claimed any attacks in the region since the resumption of hostilities.

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Elsewhere, the Israeli military, which has not joined the recent fighting, said it had intercepted two drones near the Jordanian border and was investigating where they had been launched from.