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Middle East crisis live: US and Iranian forces race to recover missing pilot from downed jet; Israel bombards Beirut | US-Israel war on Iran
Welcome summary
Hello and welcome to our continuing live coverage of the US-Israel war on Iran and its impact on the region, the world and the global economy.
Iranian and American forces were racing each other early on Saturday to recover a crew member of the first US fighter jet to go down inside Iran since the start of the war.
Tehran said it had shot down the F-15 warplane, while US media reported American special forces had rescued one of its two crew members and the other was still missing.
Iranian authorities urged people living in the country’s rugged south-west to search for the jet’s crew, as state TV broadcast images of what was said to be the mangled debris.
Iran’s military said it also downed a US A-10 ground attack aircraft in the Gulf, with US media saying the pilot was rescued.
US Central Command did not immediately comment on the loss of the F-15, but the White House said Donald Trump “has been briefed”.
The US president told NBC the F-15 loss would not affect negotiations with Iran, saying: “No, not at all. No, it’s war.”
Fresh strikes meanwhile hit Israel, Iran, Lebanon and Gulf countries – and large blasts reportedly rocked northern Tehran. Israel said it had launched a wave of strikes in the Iranian capital, alongside parallel attacks in Beirut.
Strikes by all sides have increasingly targeted economic and industrial sites, raising fears of wider disruption to global energy supplies.
Here are the other main news developments:
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Tehran rejected a US proposal for a 48-hour ceasefire, said Iran’s semi-official Fars news agency, citing an unnamed source. There was no immediate comment from the US. Earlier, the Wall Street Journal reported that Iran had officially told mediators it was unwilling to meet with US officials in Islamabad in the coming days.
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The UN force in Lebanon said a blast at one of its positions had wounded three peacekeepers, two of them seriously, in the third such incident in a week.
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Israeli fire killed a man in Syria’s Quneitra province in the south near the Israeli-occupied Golan Heights, Syrian state media said. The man was killed in an attack by “an Israeli tank”, the Sana agency said, while state TV said a car was targeted.
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An Egyptian national was killed and four others wounded after a fire at a gas complex in Abu Dhabi, caused by falling debris from an intercepted attack, the government media office said. Two of the four people hurt were from Egypt, while the others were from Pakistan, it said.
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Trump asked lawmakers to approve a $1.5tn defence budget for 2027 as the US faces rising costs from its war with Iran and mounting global security commitments. The proposal would lift Pentagon spending by more than 40% in a single year – the sharpest increase since the second world war.
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The US embassy in Lebanon said Iran and allied groups could seek to target universities in the country, where Tehran-backed Hezbollah is at war with Israel and Israeli troops are carrying out a ground invasion.
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Three tankers, including one co-owned by a Japanese company, crossed the strait of Hormuz by hugging close to Oman’s shore – a rare transit route – maritime traffic data showed on Friday.
With agencies
Key events
Israel attacks Hezbollahs targets in Beirut after destroying bridge
The Israeli military said on Saturday it had begun striking “Hezbollah infrastructure” in Beirut after it destroyed a bridge in eastern Lebanon to prevent the Iran-backed group’s reinforcements from crossing.
Two loud explosions were heard in the capital within half an hour early on Saturday and smoke was billowing from the area of one of them, AFP is reporting.
Local media reported two strikes on Beirut’s southern suburbs, an area that has been a target of repeated Israeli strikes in recent days as the military presses on with its ground invasion in the country’s south as it seeks to establish a “security zone”.
Photograph: Mohamed Azakir/Reuters
On Friday the UN interim force in Lebanon (Unifil) said a blast at one of its positions in the country’s south near the border wounded three peacekeepers, as mentioned earlier – the third similar incident in days.
Israel’s military had warned it would target two adjacent bridges over the Litani River in the area “to prevent the transfer of reinforcements and military equipment”.
The Lebanese state-run National News Agency (NNA) said:
Israeli warplanes targeted the bridge that links Sohmor with Mashghara, leading to its destruction.
Lebanese local media reported that a second bridge was also hit.
The strikes in Sohmor continued into early Saturday, with the NNA reporting the town’s centre being hit twice as warplanes roared in the skies.
Israel has previously struck five other bridges over the Litani in the country’s south, including most of the main routes crossing the waterway.
Also in Sohmor, two people were killed and 15 wounded in an Israeli strike that hit “as worshippers were leaving the town’s mosque” after Friday prayers, according to Lebanon’s health ministry.
Lebanese authorities say more than 1,300 people have been killed in a month of hostilities.
Further to the last post: as combat search and rescue (CSAR) teams are activated to retrieve a missing pilot after a downing, their soldiers – such as retired master sergeant Scott Fales – have been suiting up in a “ready room”.
Experts like Fales – a pararescue jumper who played a key role in the 1993 “Black Hawk Down” incident in Mogadishu, Somalia – are always standing by whenever US aircraft are over enemy territory.
“Before any operations are conducted … there is always a CSAR plan,” Fales told Agence France-Presse.
Simultaneously, an immense amount of intelligence is gathered and analysed on the location and status of the missing aviator. Fales said:
Everything from human intelligence to imagery intelligence to, you know, all the different drones we have looking – signals intelligence. It’s all being used to try to find this guy.
Once the missing aviator is located, a rescue plan is formulated in real time inside the helicopters.
“Those gunners are spotting and looking for threats, the pilots are looking for a place to land, we’re reaching out to that downed aviator,” Fales said.
On the ground, they ensure the pilot is actually the person they are searching for, and a threat-versus-medical-needs assessment is done. In their minds, Fales said, would be:
What kind of immediate threat are we in? How much time do we have to get this person out? What kind of injuries do they have? And then we’ll make up our mind on the type, amount of treatment that’s needed on the scene – or do we just grab and go depending on the threat?
With a fellow soldier still unaccounted for in south-west Iran, Fales said he was “very hopeful” the aviator would be located.
I’m hoping that friendly people have found him and are hiding him. Or he’s still evading.
Hide, find water: ex-pilot tells how to survive being shot down
As US forces race against time and Iran’s military to locate an aviator reportedly shot down on Friday, a former air force pilot has detailed what it takes to hide, survive and extract someone behind enemy lines.
“You’re like, ‘Oh my God, I was in a fighter jet two minutes ago, flying 500 miles an hour, and a missile just exploded, literally 15 feet from your head,’” said retired brigadier general Houston Cantwell, who is now at the Mitchell Institute for Aerospace Studies.
With that said, a pilot’s training – known as survival, evasion, resistance and escape (Sere) – would likely kick in before he or she parachutes to the ground, the Agence France-Presse news agency’s report says.
“Your best view of where you may want to go or where you may want to avoid is while you’re coming down in your parachute,” said Cantwell, who logged 400 hours of combat flight experience, including missions over Iraq and Afghanistan.
Parachuting to the ground risked foot, ankle and leg injuries, the former airman said.
There are many stories of survivors from Vietnam that had severe injuries – compound fractures – just from the ejection.
Upon landing, “take an inventory of yourself to figure out: what condition am I in? Can I even move? Am I even mobile?”
Aviators then figure out where they are, whether it is behind enemy lines, where they can hide and how they can communicate.
Cantwell said:
Try to avoid enemy capture, as long as you can. And if I were in a desert environment, I’d want to try to find some water.
Simultaneously, combat search and rescue teams – highly trained soldiers and pilots already on alert – would be activated. But the missing crew member can increase the odds of a safe rescue. Cantwell said:
My priority would be, first of all, concealment, because I don’t want to be captured. I want to try to get to a location where I can get extracted.
In a city, that may be a rooftop. In a rural setting, a field where helicopters can land. Movement was best at night, he said.
Cantwell said that when he flew, he also carried a pistol.
Welcome summary
Hello and welcome to our continuing live coverage of the US-Israel war on Iran and its impact on the region, the world and the global economy.
Iranian and American forces were racing each other early on Saturday to recover a crew member of the first US fighter jet to go down inside Iran since the start of the war.
Tehran said it had shot down the F-15 warplane, while US media reported American special forces had rescued one of its two crew members and the other was still missing.
Iranian authorities urged people living in the country’s rugged south-west to search for the jet’s crew, as state TV broadcast images of what was said to be the mangled debris.
Iran’s military said it also downed a US A-10 ground attack aircraft in the Gulf, with US media saying the pilot was rescued.
US Central Command did not immediately comment on the loss of the F-15, but the White House said Donald Trump “has been briefed”.
The US president told NBC the F-15 loss would not affect negotiations with Iran, saying: “No, not at all. No, it’s war.”
Fresh strikes meanwhile hit Israel, Iran, Lebanon and Gulf countries – and large blasts reportedly rocked northern Tehran. Israel said it had launched a wave of strikes in the Iranian capital, alongside parallel attacks in Beirut.
Strikes by all sides have increasingly targeted economic and industrial sites, raising fears of wider disruption to global energy supplies.
Here are the other main news developments:
-
Tehran rejected a US proposal for a 48-hour ceasefire, said Iran’s semi-official Fars news agency, citing an unnamed source. There was no immediate comment from the US. Earlier, the Wall Street Journal reported that Iran had officially told mediators it was unwilling to meet with US officials in Islamabad in the coming days.
-
The UN force in Lebanon said a blast at one of its positions had wounded three peacekeepers, two of them seriously, in the third such incident in a week.
-
Israeli fire killed a man in Syria’s Quneitra province in the south near the Israeli-occupied Golan Heights, Syrian state media said. The man was killed in an attack by “an Israeli tank”, the Sana agency said, while state TV said a car was targeted.
-
An Egyptian national was killed and four others wounded after a fire at a gas complex in Abu Dhabi, caused by falling debris from an intercepted attack, the government media office said. Two of the four people hurt were from Egypt, while the others were from Pakistan, it said.
-
Trump asked lawmakers to approve a $1.5tn defence budget for 2027 as the US faces rising costs from its war with Iran and mounting global security commitments. The proposal would lift Pentagon spending by more than 40% in a single year – the sharpest increase since the second world war.
-
The US embassy in Lebanon said Iran and allied groups could seek to target universities in the country, where Tehran-backed Hezbollah is at war with Israel and Israeli troops are carrying out a ground invasion.
-
Three tankers, including one co-owned by a Japanese company, crossed the strait of Hormuz by hugging close to Oman’s shore – a rare transit route – maritime traffic data showed on Friday.
With agencies
The man said his home has been targeted three times in the last five months.
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UK News
European stock markets hit record high and oil price falls to three-month low after US-Iran peace deal – business live | Business
European stock markets hit record high
European stock markets have hit a record high at the start of trading, as relief over the US-Iran peace deal ripples across global markets.
The pan-European Stoxx 600 index has jumped by 0.9% to 639 points, over the previous record high set just before the Iran war started, with shares rising in London, Frankfurt, Paris, Madrid and Milan.
Mining and travel companies are driving the rally, while oil company shares are sliding.
That follows sharp gains in Asia-Pacific markets overnight, where Japan’s Nikkei surged by 5% on hopes that the strait of Hormuz will reopen within days.
Matt Britzman, senior equity analyst at Hargreaves Lansdown, says global equity markets are starting the week firmly on the front foot after President Trump announced that a deal with Iran had been reached, adding:
The move has given investors a clear reason to dial back some of the geopolitical risk premium that has hung over markets, especially as the Strait of Hormuz is expected to reopen and oil prices move sharply lower.
Energy prices have been one of the clearest transmission channels from Middle East tensions into inflation, bond yields and equity sentiment, and there is likely to be a concerted effort to get prices down even further once this deal is finalised.
There are still details to be ironed out before markets can fully trust the agreement, but for now the direction of travel is clear: lower oil, calmer nerves and a renewed appetite for risk.
Key events
Peace deal should keep mortgage rates down
Mortgage borrowers can breathe a sigh of relief at the news of a peace deal in Iran, says Adam French, head of consumer finance at Moneyfactscompare.co.uk.
While we are far from being out of the woods yet, a lasting peace deal should dramatically reduce the risk of the Bank of England’s worst-case scenario for inflation and interest rates becoming a reality.
“Under that scenario, Base Rate could have risen to 5.25%, potentially pushing typical rates on new mortgages towards 6.75%. Instead, today’s news means mortgages rates, which have already been slowly falling for several weeks, have likely already passed their peak – at least until the next unwelcome crisis.
“Borrowers can be optimistic but with a word of caution, as inflation and economic data will continue to influence the outlook. However, a lasting peace should remove one of the biggest risks to mortgage costs and may help restore a more stable environment for hard-pressed remortgage borrowers and prospective buyers.”
Even before this morning’s drop in UK bond yields (see earlier post), average mortgage rates have dipped slightly.
Moneyfacts reports:
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The average 2-year fixed residential mortgage rate today is 5.61%. This is down from 5.62% the previous working day.
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The average 5-year fixed residential mortgage rate today is 5.58%. This is down from 5.59% the previous working day.
Why it may take months for oil flows to return to normal
Donald Trump excitedly declared: “Ships of the World, start your engines. Let the oil flow!” last night, but the reality is that it will take some time for oil flows through the strait of Hormuz to return to pre-war levels.
One reason is that many oil tankers are simply in the wrong place, after the long closure of the strait.
Another is that some production and refining facilities have been damaged by the conflict, while others were mothballed after storate facilities filled up to the brim.
A third factor is that insurers could still be wary of the conflict reigniting, and price their cover accordingly.
Neil Shearing, group chief economist at Capital Economics, explains:
Even if ships now have safe passage, tankers are in the wrong place, oil production/refining facilities need to get up to full capacity, and questions over the cost and availability of insurance for ships traversing the Strait will remain.
Our current working assumption is that ~80% of energy flows will resume by the end of Q3. Natural gas flows will be slower to return, following the damage to Qatari facilities earlier in the conflict, which according to local officials has put 17% of production offline for two to three years.
US crude drops below $80
US crude oil has dropped to its lowest level since the second week of the Iran war.
The cost of a barrel of West Texas Intermediate (WTI) light sweet crude has dropped by 6% today to $79.72 per barrel, the first time since 10 March that it has been under $80/barrel.
That could help to pull down US gasoline prices, which climbed after the conflict began, hitting consumer confidence.
UK bond yields fall
Today’s relief rally is also driving up government bond prices, pushing down the cost of borrowing.
The yield (or interest rate) on 10-year UK government debt has dropped by 6.5 basis points (0.065 of a percentage point) to 4.775%.
Two-year bond yields are down 8bps to 4.16%.
Lower bond yields indicate that that the cost of issuing new government debt has fallen, which will be a relief for the UK Treasury after the Iran war drove up borrowing costs.
Copper mining company Antofagasta is now the top riser on the FTSE 100, up almost 8%.
Trader will be concluding that an end to the Iran war will boost the world economy, leading to more demand for raw materials such as copper.
European stock markets hit record high
European stock markets have hit a record high at the start of trading, as relief over the US-Iran peace deal ripples across global markets.
The pan-European Stoxx 600 index has jumped by 0.9% to 639 points, over the previous record high set just before the Iran war started, with shares rising in London, Frankfurt, Paris, Madrid and Milan.
Mining and travel companies are driving the rally, while oil company shares are sliding.
That follows sharp gains in Asia-Pacific markets overnight, where Japan’s Nikkei surged by 5% on hopes that the strait of Hormuz will reopen within days.
Matt Britzman, senior equity analyst at Hargreaves Lansdown, says global equity markets are starting the week firmly on the front foot after President Trump announced that a deal with Iran had been reached, adding:
The move has given investors a clear reason to dial back some of the geopolitical risk premium that has hung over markets, especially as the Strait of Hormuz is expected to reopen and oil prices move sharply lower.
Energy prices have been one of the clearest transmission channels from Middle East tensions into inflation, bond yields and equity sentiment, and there is likely to be a concerted effort to get prices down even further once this deal is finalised.
There are still details to be ironed out before markets can fully trust the agreement, but for now the direction of travel is clear: lower oil, calmer nerves and a renewed appetite for risk.
BP and Shell’s shares slide
Shares in oil companies are falling, though – BP and Shell are both down 3.7%, as investors anticipate an end to their earnngs boost from the Iran war.
FTSE 100 index hits eight-week high
Boom! Britain’s stock market has hit a near-two month high at the start of trading, as investors welcome the breakthrough between the US and Iran to end the Middle East conflict.
The FTSE 100 blue-chip share index has jumped by 99 points, or almost 1%, at the start of trading to 10,570 points, its highest level since 21 April.
Engineering firm Rolls-Royce, which makes and services jet engines, is the top riser on the FTSE 100, up 5.5%, followed by British Airways parent company IAG, up 4.8%.
UK house prices dip in June
Gwyn Topham
Two bits of good news for Britons who don’t own their homes have been revealed, with data showing a drop in house prices in June as well as fewer tenants facing rent hikes last month.
Figures from Rightmove showed the average price of property coming on the to market fell by 0.6% or £2,113 to £376,191, the biggest June fall in fourteen years, with prices 0.5% below this time in 2025. The biggest drops were seen in southern England and Wales, and in asking prices for flats rather than houses.
The property site said the number of homes for sale was still at historically high levels for summer, making it more of a buyer’s market. Mortgage affordability has also improved slightly this month, with the average two-year fixed rate deal dropping about 0.1 percentage points to 5.07%, it said.
Meanwhile, figures suggest that the introduction of the Renters Right Act may already be seeing results in terms of keeping rents down for tenants.
The new law came into force at the start of May and means landlords can only increase rents for sitting tenants once a year. According to Hamptons monthly lettings index, the number of tenants who saw their rent rise was down 23% from the same month last year. Hamptons said if the rest of the year saw similar change, it would expect only 31% of sitting tenants to face increases, compared to 40%-50% in previous years.
However, the agency warned that rent rises in Scotland, where landlords have been operating under a similar system for longer, exceeded the national average. Sitting tenants who faced rent rises had an average increase of 5.4% in May, but the figure reached 7.7% in Scotland, albeit for a lower absolute rent – £952 – than the Great Britain average of £1375.
Speaking of the ECB, their president Christine Lagarde has been warning that inflation pressures are spreading in the euro area.
In an intervew with broadcaster France Culture, Lagarde warned that high energy prices are starting to feed through to other parts of the economy, saying:
“Indirect effects of inflation, we have absolutely started to see that more or less everywhere in recent weeks.”
The US-Iran agreement is well-timed for the Bank of England, which is due to set UK interest rates on Thursday.
If the strait of Hormuz does reopen, and oil flows return towards pre-war levels, there will be less inflationary pressure – and thus less need for interest rate rises.
The European Central Bank raised its interest rates last week, but this week is the turn of the BoE, the US Federal Reserve and the Bank of Japan.
Kathleen Brooks, research director at XTB, says:
Over the past month, the price of oil is down by more than a fifth, and the Brent crude price is now back at levels from early March. This is good news for inflation, which should start tumbling monthly from June, and it could ease concerns about price pressures as we lead up to some major central bank action this week. The decline in the oil price also raises questions about whether the ECB was too hasty in raising rates last week.
European stock markets are on track to jump when trading begins, in just over 20 minutes.
Germany’s DAX share index is up 1.65% in the futures market, Reuters reports, with the UK’s FTSE 100 0.75% higher.
The US dollar is weakening, as investors shift into riskier currencies.
The pound is its highest in over a week, at $1.3438.
Markets rally across Asia
There are strong gains across Asia-Pacific markets today, as investors welcome the deal between the US and Iran.
Japan’s Nikkei share index has leapt by 5%, as has South Korea’s KOSPI, while China’s CSI300 index is 1.9% higher.
Jim Reid, market strategist at Deutsche Bank, says:
Whilst the deal is very good news for markets it looks like tough conversations will have occur in the 60-day window to ensure the peace is sustainable. As an example, the Senate needs to approve any extensive sanction relief for Iran.
For now the can kicking exercise has been very well received by markets even after a strong US close on Friday where hopes were raised of a weekend signing
Introduction: Oil falls to three-month low
Good morning, and welcome to our rolling coverage of business, the financial markets, and the world economy.
The peace deal agreed between Iran and the US is sending a wave of relief through the markets today.
Oil has tumbled 4%, and markets across the Asia-Pacific region have jumped, as investors anticipate the reopening of the strait of Hormuz.
Although it is unclear exactly what has been agreed – with the final text of their memorandum of understanding unpublished – Donald Trump’s claim that “oil will flow on both ends again for the region, and the world” is pushing down energy prices – a relief for busineses, consumers, politicians and central bankers alike.
Brent crude has fallen as low as $83.04, its lowest since 10 March, after the prime minister of Pakistan announced the US and Iran will sign a memorandum of understanding in Switzerland on Friday.
That still leaves Brent above its pre-war price of $72.48 a barrel, though.
Trump has indicated that the opening of the strait is contingent upon the signing of the peace deal, scheduled for Friday.
Iran’s Mehr state news, though, reported that the agreed memorandum of understanding calls for the reopening of the strait within 30 days under “Iranian arrangements” – an indication that Tehran hasn’t surrendered its control of the waterway.
Chris Weston of IG points out that there are still obstacles to overcome:
The probable reopening of the Strait of Hormuz later this week would represent a significant positive development. Markets had increasingly questioned how long inventory draws could offset supply disruptions and whether physical dislocations would begin weighing more heavily on risk assets. The focus now shifts towards understanding what normalisation of logistics could realistically look like, and how quickly shipping volumes can return to pre-conflict levels of 120 to 140 commercial vessels transiting eastbound and westbound each day.
There are still obstacles to overcome. Mines may need to be cleared, and there may be structural damage to refineries and export facilities around the region that will take time to repair and come back to pre-conflict capacity.
The agenda
Paying tribute, Sir Keir Starmer said Lord Hattersley “was a giant of the Labour movement”.
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