Iran stops talking to mediators over Israel fighting Hezbollah in Lebanon, Iranian reports say

Iran stopped com­mu­ni­cat­ing with me­di­a­tors af­ter Is­rael threat­ened to bomb Beirut as it fights the Iran­ian-backed Lebanese mili­tia Hezbol­lah, two se­mi-of­fi­cial Iran­ian news agen­cies re­port­ed Tues­day.

Halt­ing com­mu­ni­ca­tion like­ly is a means to fur­ther pres­sure U.S. Pres­i­dent Don­ald Trump over ne­go­ti­a­tions on the cease­fire, which in­clude try­ing to loosen Iran’s choke­hold on the Strait of Hor­muz, through which a fifth of all oil and nat­ur­al gas passed in peace­time. Trump then could po­ten­tial­ly pres­sure Is­raeli Prime Min­is­ter Ben­jamin Ne­tanyahu to halt or slow the ad­vance of his forces, which have moved deep­er in­to Lebanon.

Hezbol­lah re­mains one of Iran’s chief al­lies in its self-de­scribed “ax­is of re­sis­tance” against Is­rael.

Mean­while, year-on-year in­fla­tion in Iran reached a lev­el in May un­seen since World War II, un­der­lin­ing the eco­nom­ic pain av­er­age Ira­ni­ans face as the Is­lam­ic Re­pub­lic wor­ries about the war with Is­rael and the Unit­ed States restart­ing.

Iran re­ports say Tehran not talk­ing

The re­ports by the Fars and Tas­nim news agen­cies, both be­lieved to be close to Iran’s para­mil­i­tary Rev­o­lu­tion­ary Guard, come as Iran in­sists the fight­ing in Lebanon is part of the wider cease­fire talks with the Unit­ed States over the war. Is­rael and the U.S. main­tain the fight­ing in Lebanon is sep­a­rate from the Iran war talks.

A re­gion­al of­fi­cial in­volved in the me­di­a­tion, speak­ing on con­di­tion of anonymi­ty to dis­cuss the talks, said Iran has not com­mu­ni­cat­ed at all on Tues­day af­ter say­ing that a cease­fire need­ed to be en­forced in Lebanon for ne­go­ti­a­tions to con­tin­ue.

The U.S. is ea­ger to ease the choke­hold on the strait. At the same time, Iran faces eco­nom­ic chal­lenges as its oil-backed econ­o­my re­mains un­der a U.S. naval block­ade.

Eco­nom­ic pres­sure in the past has sparked na­tion­wide protests, some­thing Iran’s theoc­ra­cy has been try­ing to avoid since a crack­down on demon­stra­tors in Jan­u­ary killed over 7,000 peo­ple, ac­cord­ing to ac­tivists’ es­ti­mates.

But even as hard-lin­ers hold gun-han­dling work­shops and or­ga­nize mar­riages un­der the shad­ow of a bal­lis­tic mis­sile to bol­ster spir­its, ex­perts note that new demon­stra­tions could emerge if peo­ple find them­selves priced out of feed­ing their fam­i­lies.

“I have no doubt that if Trump leaves (Iran with­out a for­mal peace deal) ... most prob­a­bly, we will see some­thing like Jan­u­ary by the end of sum­mer be­cause of the eco­nom­ic and so­cial sit­u­a­tions,” an­a­lyst Mohsen Jalil­vand said in a video pub­lished by Iran’s Fararu news web­site.

‘We will def­i­nite­ly have high­er prices’

Iran’s Cen­tral Bank said the con­sumer price in­dex, which mea­sures a bas­ket of goods and ser­vices, reached 77.2% in May com­pared to the year be­fore. It added the rate is 8.5% high­er than in April. In­fla­tion in dai­ly and gen­er­al needs — like med­i­cine, taxi fares, to­bac­co and com­mu­ni­ca­tion fees — rose 113.8% from the year be­fore.

Iran on­ly saw worse in­fla­tion in 1942 dur­ing World War II, sparked by the British and So­vi­ets in­vad­ing the coun­try and tak­ing over its rail­way, dis­rupt­ing food sup­plies. The lack of food, wors­ened by a poor har­vest, sparked hy­per­in­fla­tion and a famine. Hunger and a ty­phus out­break killed many.

A pri­vate eco­nom­ic think tank in Iran, the Bam­dad In­sti­tute of Eco­nom­ic Stud­ies, de­scribed the cur­rent fig­ures as “an un­prece­dent­ed rate since World War II.” Iran’s Cen­tral Bank did not ac­knowl­edge the sig­nif­i­cance of the fig­ures.

Airstrikes this year have great­ly dam­aged Iran­ian busi­ness­es and its oil in­dus­try, Mean­while, the U.S. block­ade has been tar­get­ing Iran­ian crude oil ship­ments try­ing to reach the in­ter­na­tion­al mar­ket, a key source of hard rev­enue. Tax rev­enues have been de­pressed by busi­ness­es strug­gling even af­ter the fight­ing paused.

The ri­al, which trad­ed at 32,000 to $1 in 2015, now trades at over 1.7 mil­lion to $1.

“We will def­i­nite­ly have high­er prices,” Iran­ian Pres­i­dent Ma­soud Pezeshkian warned in May. “We are fight­ing and we must ac­cept this hard­ship.”

Past eco­nom­ic woes have led to protests

In 2017 in­to 2018, ris­ing food prices sparked demon­stra­tions that killed over 20 peo­ple and saw hun­dreds ar­rest­ed. An in­crease in gov­ern­ment-sub­si­dized gaso­line prices caused protests that saw over 300 peo­ple re­port­ed­ly killed.

Then came the protests over the ri­al at the start of this year, the most in­tense demon­stra­tions to shake the Is­lam­ic Re­pub­lic since its 1979 rev­o­lu­tion and chaot­ic years that fol­lowed.

Tehran-based econ­o­mist Saeed Leilaz, speak­ing to The As­so­ci­at­ed Press, warned that an­nu­al in­fla­tion in Iran could reach 80%.

“Iran’s so­ci­ety can­not tol­er­ate above 25%” an­nu­al in­fla­tion, he said. —DUBAI, Unit­ed Arab Emi­rates (AP)

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Sto­ry by JON GAM­BRELL, SAMY MAGDY and NASS­ER KARI­MI

Nass­er Kari­mi re­port­ed from Tehran, Iran. Magdy re­port­ed from Cairo.