President Donald Trump said on Sunday the US Navy would immediately start blockading the Strait of Hormuz, raising the stakes after marathon talks with Iran failed to reach a deal to end the war, jeopardising a fragile two-week ceasefire.

Trump also said in a post on Truth Social that the US would interdict every vessel in international waters that had paid a toll to Iran, and begin destroying mines that he said the Iranians had dropped in the strait, a choke point for about 20% of global energy supplies that Iran has blocked.

"Effective immediately, the United States Navy, the Finest in the World, will begin the process of BLOCKADING any and all Ships trying to enter, or leave, the Strait of Hormuz," he said.

"I have also instructed our Navy to seek and interdict every vessel in International Waters that has paid a toll to Iran. No one who pays an illegal toll will have safe passage on the high seas," Trump added.

"Any Iranian who fires at us, or at peaceful vessels, will be BLOWN TO HELL!" he added.

"The bad news is that we have not reached an agreement, and I think that's bad news for Iran much more than it's bad news for the United States of America," Vice President JD Vance, the head of the U S delegation at the weekend talks, said earlier. "We've made very clear what our red lines are," Vance added.

Iran cites lack of trust
Iran's Parliamentary Speaker Mohammad Baqer Qalibaf, who led his country's delegation along with Foreign Minister Abbas Araqchi, blamed the US for not winning Tehran's trust despite his team offering "forward-looking initiatives". 

"The U S has understood Iran's logic and principles and it's time for them to decide whether they can earn our trust or not," Qalibaf said on X.

The talks, after a ceasefire earlier in the week, were the first direct US-Iranian meeting in more than a decade and the highest-level discussions since the 1979 Islamic Revolution.  Vance said Iran had chosen not to accept American terms, including not to build nuclear weapons.

"I could go into great detail, and talk about much that has been gotten but, there is only one thing that matters — IRAN IS UNWILLING TO GIVE UP ITS NUCLEAR AMBITIONS!" Trump said later.

Iran's semi-official Tasnim news agency said "excessive" US demands had hindered reaching a deal. Other Iranian media said there was agreement on a number of issues, but the Strait of Hormuz and Iran's nuclear programme were the main points of difference.

‘Imperative’ to maintain ceasefire
Pakistan's Foreign Minister Ishaq Dar said it was "imperative" to preserve the ceasefire that was agreed last Tuesday as the sides attempt to wind down a war that began on February 28 with air strikes by the U S and Israel on Iran.

Israeli security cabinet minister Zeev Elkin told Army Radio that more talks were still an option, but added: "The Iranians are playing with fire."

In a brief press conference, Vance did not mention reopening the Strait of Hormuz.

Even as the talks took place, US ally Israel continued bombing Tehran-backed Hezbollah militants in Lebanon, insisting that the conflict was not part of the Iran-U.S. ceasefire. Iran says the fighting in Lebanon must stop.

The Israeli military said it struck Hezbollah rocket launchers overnight into Sunday and black smoke could be seen rising in the southern suburbs of the Lebanese capital Beirut on Sunday. In Israeli villages near the border, air raid sirens sounded, warning of incoming rocket fire from Lebanon. 

Iranian demands
Tehran is demanding control of the Strait of Hormuz, payment of war reparations and a ceasefire across the region, including in Lebanon, according to Iranian state TV and officials.

Tehran also wants to collect transit fees in the Strait of Hormuz.

Despite the differences in Islamabad, three supertankers fully laden with oil passed through the Strait of Hormuz on Saturday, shipping data showed, in what appeared to be the first vessels to exit the Gulf since the ceasefire deal.

Hundreds of tankers are still stuck in the Gulf, waiting to exit during the two-week ceasefire period.  

Trump's stated goals have shifted, but as a minimum, he wants free passage for global shipping through the strait and the crippling of Iran's nuclear enrichment programme to ensure it cannot produce an atomic bomb.

Tehran has long denied seeking to build a nuclear weapon.