AS IT HAPPENED: Trump signals end to war may be close; US Navy fires on Iranian tanker; Oil prices drop on hope of peace deal

Thank you for following our live coverage of the conflict in the Middle East.

Here is a recap of today's key developments:

- There is a warning today that any deal to reopen the Strait of Hormuz would leave meaningful impacts for oil supplies still weeks away.

- Trump has forecast the war will end quickly as he pushes for an agreement with Iran.

- Iran is expected to hand over its reply to mediators about the US proposal to end the war tomorrow.

- Israel targeted a top Hezbollah commander overnight in the first strike on Beirut since the ceasefire with Lebanon.

- The Strait of Hormuz shutdown is costing one of the world's biggest shipping companies $US60 million ($82m) every week.

The Trump administration's approach to the Iran war over the past 24 hours has pinballed from declarations that a tenuous ceasefire was holding and military operations were over to new threats of bombing the Islamic Republic.

It started yesterday with Defence Secretary Pete Hegseth explaining how the US military was protecting stranded ships so they could traverse the Strait of Hormuz. He insisted it was a defensive operation and the truce was still in place even though Iran had launched missiles and drones at US forces, which sank Tehran's small attack boats.

Then, Secretary of State Marco Rubio told reporters at the White House that the military operation was "concluded" and that the US. achieved its objectives. But in almost the same breath, he said President Donald Trump was still seeking a "path of peace" that required Iran to agree to a deal to reopen the vital oil shipping corridor.

By Tuesday evening US time, Trump announced that the effort to protect ships was paused to see if an agreement could be reached. Then on Wednesday morning, he again warned that bombing would resume if Tehran didn't agree to US terms.

The Trump administration's shifting and often contradictory messaging throughout the Iran war has produced ever more confusion this week as the president and his aides presented a dizzying narrative over the US strategy to unblock the Strait of Hormuz and wrap up the war that drastically changed over the course of mere hours.

Southeast Asian leaders plan to issue a contingency plan that upholds international law, sovereignty and freedom of navigation in what could be seen as a veiled rebuke to the United States, Israel and Iran over the Middle East war.

The declaration is set to be issued by the leaders from the Association of Southeast Asian Nations when they meet in an annual summit on Friday in the central Philippine island province of Cebu.

"We emphasised the importance of upholding international law and ensuring that regional cooperation remains anchored in dialogue, trust and respect for sovereignty," the draft statement says.

Southeast Asia will "maintain open, transparent and predictable markets as well as secure and open sea lanes, and ensure freedom of navigation, the safe, unimpeded and continuous transit passage of vessels and aircraft in straits used for international navigation."

That will "preserve the unimpeded flow of essential goods, including food, energy and key inputs, in accordance with international law, particularly the 1982 United Nations Convention on the Law of the Sea."

The ASEAN leaders will affirm "shared resolve" to fortify regional resilience.

US President Donald Trump has taken to Truth Social to post a chart detailing the length of various wars the US has been involved in.

He highlights the "Iran excursion" at a comparatively low six weeks.

By our calculations, it has been nine weeks and four days since February 28, when the USA and Israel first launched strikes on Iran.

Shadow frontbencher Andrew Hastie says the Middle East war and Australia's vulnerable position in the supply chain is proof the country needs to become more self-reliant.

"I think what [these crises] have revealed is that Australia is a very trade-exposed nation," he said on an ABC radio live forum.

"We've offshored a lot of our sovereign capability, whether it's advanced manufacturing, our refining capacity when it comes to liquid fuel, and other key things that we need as a country."

He called on the government to invest more in the country's manufacturing and production capabilities.

"Australians pay insurance for home contents, for health, for life, for their employment, for a whole range of things," he said.

"Why aren't we as a nation investing more in our insurance so that when we hit hard times like we are at the moment, we can be more resilient? I think that's the task ahead of us."

Hastie has previously been vocal about Australia increasing its manufacturing output, making several social media posts on the topic last year.

Australian trade unionists are today protesting against the war outside the United States consulate in Sydney.

The demonstration is organised by the Peace is Union Business coalition, which includes the National Tertiary Education Union, NSW Teachers Federation and the Maritime Union of Australia.

Organisers say the conflict is a direct threat to workers' living standards in Australia.

"Trump's fingerprints are on every petrol pump, supermarket checkout, and mortgage rate rise in the country. He is enemy number one of the Australian worker," said South Coast Labour Council secretary Arthur Rorris.

The Strait of Hormuz shutdown is costing one of the world's biggest shipping companies US$60 million ($82m) every week.

German firm Hapag-Lloyd says rising fuel and insurance costs are hitting it particularly hard.

It says alternative routes to other harbours or over land are limited.

Hundreds of merchant ships remain bottled up in the Persian Gulf, unable to reach the open sea without passing through the strait.

Raising hopes of a peace deal and falling oil prices have buoyed Australian investors, with the local sharemarket climbing 1 per cent in early trading this morning.

The S&P/ASX 200 Index rose 89 points, or 1 per cent, in the opening minutes of trade.

Earlier, Wall Street recorded strong gains. The S&P 500 climbed 1.5 per cent. The Dow Jones Industrial Average jumped 1.2 per cent, and the Nasdaq composite rose 2 per cent to its own record.

The price for a barrel of Brent crude oil, the international standard, fell 7.8 per cent to US$101.27, down from more than US$115 early this week.

Trump has forecast the war will end quickly as he pushes for an agreement with Iran.

In a phone rally with Republican supporters, the president reiterated his demand the Iranian regime must not be permitted nuclear weapons, reports Reuters.

"When you look at the kind of things that are happening, we are doing that for one very important reason: We cannot allow them to have a nuclear weapon," Trump said in a call with party supporters.

"So, I think most people understand that. They understand that what we are doing is right, and it'll be over quickly," he said.

Iran is expected to hand over its reply to mediators about the US proposal to end the war on Thursday (Friday AEST), a regional source told CNN.

Iran has been reviewing the proposal from the Trump administration, as a source said that both sides are advancing toward an agreement to end the war.

The White House received positive feedback from Pakistani mediators on Tuesday that the Iranians were progressing toward a compromise, two administration officials told CNN while offering some skepticism about Pakistan's optimism.

But a renewed diplomatic push has emerged in recent days, the regional source said.