Dubai, 8 May

The Iran war's shaky ceasefire was further strained on Friday as the United Arab Emirates responded to a missile and drone attack hours after the US said it thwarted attacks on three Navy ships in the Strait of Hormuz and retaliated against Iranian military facilities.

There were no immediate reports of damage in the UAE.

Iran and the US are trading blows as their negotiators are seeking a deal to end the fighting, but so far they've avoided a return to all-out fighting. It's not clear how close the two sides are to a deal on issues like Iran's nuclear program, which the US and Israel vowed to halt when they launched the war on Feb. 28, or the Strait of Hormuz, a vital waterway that Iran has all but closed in a bid to pressure the global economy.

On Thursday, Tehran said it was examining the latest US proposals for ending the war delivered to it via Pakistan, which is serving as a mediator.

Trump played down the exchange of fire between Iran and the US Navy on Thursday. In a phone call with a reporter for ABC, Trump called the retaliatory strikes against Iran “just a love tap.” He insisted the ceasefire is holding, and a deal could come “any day,” but reiterated threats of bombing if Tehran does not accept a deal that allows for resumption of oil and natural gas shipments disrupted by the conflict.

“They have to understand: If it doesn't get signed, they're going to have a lot of pain,” he told reporters in Washington.

Iranian state media said the country's forces exchanged fire with “the enemy” on Qeshm Island in the Strait of Hormuz. It also reported loud noises and continuous defensive fire in western Tehran late Thursday night.

The ceasefire between the US and Iran has largely held since April 8. In-person talks between the two countries, hosted by Pakistan last month, failed to reach an agreement to end the war that began on 28 Feb when the US and Israel launched strikes against Iran.

US military says it's not seeking escalation

The UAE's defence ministry advised residents not to approach, photograph or touch “any debris or fragments that have fallen as a result of successful air interceptions.”

Hours earlier, the US military said it had intercepted Iranian attacks on three Navy ships in the Strait of Hormuz Thursday night and “targeted Iranian military facilities responsible for attacking US forces.”

US Central Command said in a social media post that US forces intercepted “unprovoked Iranian attacks” and responded with self-defence strikes.

The US military said no ships were hit. It said it doesn't seek escalation but “remains positioned and ready to protect American forces.”

President Donald Trump told reporters that the ceasefire was holding despite the violence.

Meanwhile, direct talks between Israel and Lebanon were scheduled to resume next week in Washington, according to a US official who spoke on condition of anonymity to discuss plans for the closed-door meetings. The official said talks will be held on May 14 and 15.

Iran creates an agency to control passage at Hormuz

Earlier on Thursday, a shipping data company reported that Iran has created a government agency to vet and tax vessels seeking passage through the crucial strait.

The Iranian effort to formalise control over the channel raised new concerns about international shipping, with hundreds of commercial vessels bottled up in the Persian Gulf and unable to reach the open sea. Still, hope that the two-month conflict could soon be over buoyed international markets.

The report by shipping data firm Lloyd's List Intelligence that Iran has established a new government agency to approve transit and collect tolls from shipping in the strait raised concerns over the freedom of navigation on which global trade depends.

The agency, called the Persian Gulf Strait Authority, is “positioning itself as the only valid authority to grant permission to ships transiting the strait,” Lloyd's reported in an online briefing Thursday. Lloyd's said the authority had emailed it an application form for ships seeking passage.

On Friday, an oil tanker that passed through the Strait of Hormuz in mid-April arrived off South Korea's coast for its 1 million barrels of crude to be unloaded at the HD Hyundai Oilbank refinery. South Korea, which last year imported more than 60 per cent of its crude through the strait, has capped prices of gasoline and other petroleum products as the war raises fears of an energy crisis.

Iran has effectively closed the Strait, a vital waterway for the shipment of oil, gas, fertiliser, and other petroleum products, while the US is blockading Iranian ports. The disruptions have sent fuel prices skyrocketing and rattled the global economy.

The new Iranian agency formalises a system Iran has used to let ships through the strait and charge tolls during the war. Iran aims to control which ships pass and, for at least some vessels, impose a tax on their cargo.

Maritime law experts say Iran's demands to vet or tax vessels violate international law. The United Nations Convention on the Law of the Sea calls for countries to permit peaceful passage through their territorial waters. The US has threatened to impose sanctions on companies that pay tolls to Iran.

The US and its Gulf allies are pushing for the UN Security Council to support a resolution that condemns Iran's chokehold on the strait and threatens sanctions. A prior resolution calling for reopening the strait was vetoed by Iran's allies, Russia and China.