By Jana Choukeir and Laila Bassam
DUBAI/BEIRUT, June 4 (Reuters) - The pro-Iran Hezbollah movement rejected a new ceasefire in Lebanon on Thursday and Israel said it would not withdraw troops from the country, undermining U.S. President Donald Trump's efforts to halt fighting there to forge peace with Tehran.
Iran has made a ceasefire in Lebanon a condition for any peace deal with Washington, and has suggested in recent days that it could intervene directly in support of its proxy Hezbollah if Israel
keeps up or escalates attacks there.
Lebanese President Joseph Aoun said the ceasefire would come into force within 24 hours of all concerned parties approving it. However, Hezbollah leader Naim Qassem rejected the Washington declaration, insisting "resistance will continue".
There was no immediate response from Israel, Lebanon or the United States to Qassem's remarks. Hezbollah is not a party to the U.S.-brokered agreement reached between Israel and the Lebanese government on Wednesday, but would be required to halt attacks.
Israel kept up strikes in southern Lebanon on Thursday and Defence Minister Israel Katz said Israeli forces would not be withdrawing from the area or halting operations in the country, which they invaded in March in parallel with the war in Iran.
The commander of Iran's Revolutionary Guards Quds Force - which established Hezbollah in 1982 - said "the minimum demand of the resistance" was Israel's withdrawal to positions it held before the war began.
Hostilities between Hezbollah and Israel reignited on March 2, when the group opened fire in support of Tehran as it came under U.S.-Israeli attack. The war has continued despite several ceasefires declared from Washington since April.
FLARE-UP IN GULF
The attempt to reach a ceasefire in Lebanon comes after a flare-up in violence across the region that put Trump's efforts to end the war in new jeopardy. Iranian and U.S. forces traded attacks in the Gulf on Wednesday in one of the most intense bouts of fighting since a separate ceasefire halted large-scale U.S.-Israeli bombing of Iran in early April.
Iranian forces struck Kuwait, damaging its airport and injuring dozens of people, authorities said, while the U.S. military carried out strikes near the Strait of Hormuz. The strait, through which a fifth of the global oil and liquefied natural gas supplies normally flow, remains largely closed more than three months after the U.S. and Israel launched their strikes on Iran.
Oil prices fell by about 3% on Thursday on hopes that a Lebanon ceasefire could help Washington and Iran find a diplomatic off-ramp from their war.
Trump, under pressure at home to end the war and bring down fuel prices, suggested there could be progress in negotiations with Iran soon.
"If it happens, it could happen over the weekend," Trump told reporters in the White House's Oval Office on Wednesday, without elaborating on what he expected to happen within that timeframe.
Trump said that parties were working to separate the issue of reopening the strait from the conflict in Lebanon.
IRAN DENIES TARGETING KUWAIT AIRPORT
Wednesday's strikes on Kuwait damaged airport facilities and diplomatic missions, killing one person and injuring more than 60 others, Kuwaiti authorities and state media said.
Iran's elite Revolutionary Guards said they did not fire at Kuwait's airport and blamed the destruction on U.S. interceptor missiles that failed to hit their targets, according to Iranian state media. The U.S. military said Iranian drones targeted the airport deliberately.
Iranian media reported the Revolutionary Guards also attacked the headquarters of the U.S. Fifth Fleet in Bahrain and a U.S. airbase. U.S. Central Command denied its bases had been hit and said Iranian ballistic missiles failed to strike their targets in the region.
CENTCOM said it had carried out a new round of "defensive strikes" in southern Iran, targeted missile launch sites and Iranian boats seeking to lay mines, and conducted strikes on Qeshm Island near the strait after attempted Iranian attacks.
IRAN SETS CONDITIONS FOR PEACE
Last week, Iran and the U.S. signalled progress towards a tentative initial agreement to halt the war and reopen the strait, but the two sides have yet to sign off on the deal, which would leave more complex negotiations for later.
Iran's Supreme Leader Ayatollah Mojtaba Khamenei said on Thursday that Iran's enemies had already been defeated on the battlefield and were now seeking to sow internal divisions.
Khamenei has not been seen in public since he succeeded his father, who was killed in an airstrike at the start of the war.
In addition to Tehran conditioning a deal on an end to fighting in Lebanon, it also wants access to billions of dollars in oil revenue, waivers on sanctions on crude exports, a lifting of a U.S. blockade on its ports and leverage over the strait.
Trump has said his top priority is to stop Iran from acquiring nuclear weapons. Iran says its atomic programme is for peaceful purposes.
(Reporting by Reuters bureausWriting by Ros RussellEditing by Peter Graff)
