The U.S. and Israel exchanged missile fire with Iran as the war across the Middle East approached the one-month mark, with no sign of Tehran accepting U.S. President Donald Trump’s demands for a ceasefire.

Israeli Defense Minister Israel Katz said the military would escalate its assault on the Islamic Republic in response to the targeting of civilians, while Tehran continued to retaliate against Israel and Gulf Arab countries including Saudi Arabia.

The attacks came after Trump pushed back his deadline for Iran to agree to reopen the Strait of Hormuz or face strikes on its power plants. The 10-day extension was his second since Saturday’s threat to destroy the infrastructure in the absence of Tehran reopening the critical waterway, a chokepoint that’s become increasingly urgent with global energy and commodity shortages mounting.

Brent crude rose almost 3% to about $111 a barrel on Friday, extending its climb this year to 82%. The conflict has caused fuel shortages and fears of stagflation across major and emerging market economies.

Iran’s Mobarakeh Steel, one of the country’s biggest steel producers, was among the targets of strikes on Friday, the semi-official Fars news agency reported.

Saudi Arabian authorities reported intercepting several Iranian drones and missiles, many heading toward the capital Riyadh. In Qatar, residents of Doha got missile alerts on their phones for the first time in days. Kuwait said drones damaged two ports. There were no casualties announced for any of the incidents.

Iran has rejected a 15-point list of ceasefire terms delivered by the Trump administration via intermediaries in Pakistan, and has countered with five conditions of its own — including maintaining sovereignty over the Strait of Hormuz.

While the two sides appear far apart in the effort to reach an agreement, Trump said talks with Iran are going “very well” and that the American war effort is “ahead of schedule.”

Trump’s extended deadline allows more time for the U.S. to amass troops in the region, with speculation growing of an imminent land deployment.

The Wall Street Journal reported the Pentagon is considering sending as many as 10,000 additional soldiers to the Middle East. That’s in addition to 5,000 Marines and more than a thousand paratroopers already ordered to the region, according to people familiar with the matter, who asked not to be identified discussing plans that haven’t been made public.

Some European governments think it’s all but inevitable the U.S. will deploy ground troops, despite the high risk of casualties, according to a diplomat familiar with the matter who requested anonymity to discuss sensitive subjects.

Iran’s government believes there’s a high likelihood Trump will attempt to take over Kharg Island, the Persian Gulf site from which Iran sends most of its oil exports, according to an official from the Islamic Republic, who spoke on condition of anonymity.

Military analysts said that aside from Kharg Island, the U.S. could try to take control of the Iranian side of the Strait of Hormuz in a bid to reopen the vital waterway to oil and gas tankers and container ships. It could also send special forces to retrieve Iran’s roughly 440 kilograms of highly-enriched uranium, the whereabouts of which have been a mystery to nuclear inspectors since the U.S. and Israel last bombed Iran in June. All options would be exceptionally risky for U.S. troops.

Publicly, Iranian officials remain defiant and said Trump is backing down from threats in order to lower energy prices.

Global stocks are experiencing their biggest monthly drop since 2022, with the selloff continuing on Friday. Bonds extended losses on fears of rising prices. The OECD has sharply increased its inflation forecast for Group of 20 economies this year to 4%, with an even higher pace in the U.S.

On Thursday, Iranian media indicated the country was still awaiting a response after rejecting a U.S. proposal to end the war. The Iranian government has demanded certain guarantees in addition to its request to control Hormuz, including that the U.S. and Israel won’t resume attacks in the future and the payment of war reparations. The U.S. and Israel are unlikely to accept any of those.

Iran also wants an end to the war on all fronts, a likely reference to Israel’s parallel war against the Tehran-backed Hezbollah militant group in Lebanon.

Trump has said any peace agreement must prohibit Iran from ever obtaining a nuclear weapon or enriching radioactive material for civilian purposes. The U.S. plan also stipulates that the Islamic Republic can only have a reduced missile arsenal for self-defense only, according to people familiar with the matter. Iran would get sanctions relief in return.

Reopening the Hormuz strait is key for Trump, with the waterway effectively closed since the start of the war. Normally, one fifth of the world’s supplies of oil and liquefied natural gas flow through the passage. If it’s shut until June because of the continued threat of Iranian attacks on ships, crude prices may soar further to $200 a barrel, easily a record in nominal terms, Macquarie Group commodity analysts said on Thursday.

In the U.S., pump prices have risen to almost $4 a gallon on average, which could hurt Trump’s Republican party ahead of midterm elections in November.

Iranian lawmakers are drafting a bill to impose a transit toll in Hormuz, according to the Fars news agency, underscoring the country’s confidence it can keep some form of control on the strait’s traffic. It’s already charging some ships millions of dollars for safe passage, Bloomberg reported this week.

More than 4,500 people have been killed in the conflict so far, according to governments and non-governmental agencies. Around three-quarters of fatalities have been in Iran, while almost 1,100 people have died in Lebanon, where more than a million people have been displaced. Dozens of people have been killed in Israel and Arab Gulf states.

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