Prime Minister Benjamin Netanyahu warned Sunday that Israel’s conflict with Iran remains far from resolved, hours after President Trump rejected Tehran’s latest diplomatic overture and declared any peace framework “dead on arrival.”
The twin statements dash hopes for near-term stability in the Middle East and signal continued volatility for global oil markets, which have swung wildly since the conflict intensified earlier this spring. Brent crude jumped 3.2% in overnight trading to $89 per barrel, threatening to push U.S. gasoline prices above $4 a gallon nationwide ahead of the summer driving season.
Speaking at a military briefing in Tel Aviv, Netanyahu said Israel “will not accept half-measures or cosmetic agreements” with Iran. He pointed to continued Iranian support for proxy forces across the region and Tehran’s advancing nuclear program as evidence that diplomatic gestures lack substance.
“This war is not over,” Netanyahu said. “It will end only when Iran no longer poses an existential threat to the State of Israel and our allies in the region.”
Trump’s rejection of Iran’s proposal came via social media late Saturday, where he called the offer “another stalling tactic from a regime that has never negotiated in good faith.” The Iranian proposal, details of which remain classified, reportedly included partial limits on uranium enrichment in exchange for sanctions relief.
The impasse carries direct consequences for American households already stretched by inflation. Energy analysts warn that sustained Middle East tensions could add 50 cents per gallon at the pump by July 4th. Higher fuel costs ripple through supply chains, raising prices on everything from groceries to airline tickets.
Retirement portfolios face renewed pressure as defense stocks surge while broader markets retreat on recession fears. The S&P 500 dropped 1.8% Friday on concerns that prolonged conflict could disrupt global commerce and force the Federal Reserve to maintain higher interest rates longer than expected.
Congressional Republicans praised Trump’s firm stance, with Senate Foreign Relations Committee Chairman Marco Rubio calling it “exactly the clarity our allies need.” Democrats expressed concern about escalation risks, though party leadership has largely backed administration policy on Iran.
Defense Secretary Pete Hegseth told reporters the U.S. maintains “full readiness to support Israel’s defense” but emphasized American forces are not engaged in direct combat operations. Two carrier strike groups remain positioned in the eastern Mediterranean and Persian Gulf.
Markets will watch this week for any Iranian response to Trump’s rejection and whether crude oil prices stabilize or continue climbing toward three-digit territory.
Key Points
- Netanyahu says Israel’s war with Iran “is not over” despite Tehran’s latest diplomatic proposal
- Trump rejected Iran’s offer as a “stalling tactic,” ending hopes for near-term peace framework
- Oil prices jumped overnight, threatening to push U.S. gas above $4 per gallon ahead of summer travel season
https://www.cnbc.com/2026/05/10/netanyahu-says-iran-war-is-not-over-as-peace-deal-remains-elusive.html – May 10, 2026
