The US administration is attempting to redirect Iranian assets to Gulf countries to rebuild and repair the damage caused to Iran following a wave of missile and drone attacks against Kuwait and Bahrain.US Treasury Secretary Scott Besant has directed a team to assess the cost of damage already caused to America’s Gulf allies, Reuters reports, with Washington also considering the use of Iranian assets to repair any future destruction linked to the conflict.The announcement came a day after Mohsen Rezaei, a military adviser to Iran’s Supreme Leader Ayatollah Mojtaba Khamenei, said a potential peace deal between Tehran and Washington depended on the release of $24 billion of Iranian assets seized by the United States.The latest development threatens to further complicate the already fragile ceasefire efforts between the two countries, with fighting re-flaring over the weekend despite ongoing diplomatic efforts to secure an interim agreement.US officials are investigating Iranian assets that could potentially be redirected toward reconstruction efforts in Gulf countries hit by Iranian attacks. This proposal came when the deadlock in US-Iran talks appeared to be increasing. Rezaei told CNN on Friday that Tehran sees the release of $24 billion as an important test of confidence and a necessary step toward any comprehensive agreement.Meanwhile, military tensions continued to rise across the region.US forces attacked Iranian coastal radar installations on Goruk and Qeshm Island in the Strait of Hormuz early Saturday after intercepting drones that US Central Command said posed a threat to maritime traffic. The US military later said it also shot down two additional Iranian attack drones near the strategic waterway.Iran’s Revolutionary Guard responded by firing missiles toward US military facilities in Kuwait and Bahrain. Kuwaiti officials said that seven ballistic missiles passed over residential areas, causing material damage but no casualties. In Bahrain, warning sirens were sounded in several parts of the country and residents were urged to seek shelter.While Iranian state media claimed the missiles struck US bases in both countries, the US military said six missiles were intercepted and the seventh failed to reach its intended target.The United States and Iran are engaged in indirect talks aimed at achieving an interim arrangement that would halt hostilities while leaving more contentious issues, including Tehran’s nuclear program, for future negotiations.However, progress remains elusive as both sides continue diplomatic engagement as well as military operations.Tehran is seeking access to billions of dollars of oil revenues, relief from restrictions on crude exports, the removal of sanctions affecting its ports and greater leverage over the Strait of Hormuz, through which about a fifth of global oil shipments passed before the conflict disrupted maritime traffic.Signaling that mediation efforts are ongoing, Pakistani Interior Minister Mohsin Naqvi arrived in Tehran on Saturday with what Iranian media described as a ‘special letter’ from Pakistan’s army chief and prime minister to Khamenei. Naqvi is expected to hold talks with senior Iranian officials, including Iranian Foreign Minister Abbas Araqchi.The conflict has also increased pressure on US President Donald Trump, who faces domestic criticism over rising fuel prices and widespread economic disruptions caused by the war.Speaking to NBC News, Trump said US operations had significantly reduced Iran’s missile and drone capabilities, but acknowledged that Tehran still retained a substantial arsenal.“They have some missiles, they have some drones. I would say percentage-wise, probably 21% to 22% of their missiles. That’s a lot of missiles, but it’s not what we had when we first attacked,” Trump said.Beyond the Gulf, tensions remain high in the broader region. In Lebanon, two army officers and a soldier were killed in an Israeli attack on a military vehicle in the south of the country. The Israeli military said it was investigating the incident.Iran has linked any comprehensive agreement with Washington to a ceasefire in Lebanon between Israel and the Iran-backed Hezbollah movement. However, Israel has said its military operations will continue, highlighting the complex web of territorial disputes that is complicating peace efforts.Negotiations are stalled and three months into the war, prospects for a permanent agreement remain uncertain.