By Tala Ramadan and Steve Holland
DUBAI/WASHINGTON, Aug 10 (Reuters) - U.S. President Donald Trump on Monday demanded Iran pay compensation for the deaths of people he said it had killed in wars, attacks and protests, raising the rhetorical stakes with Tehran as hopes faded for an imminent deal to reopen the Strait of Hormuz.
Trump said he was responding to Iran's earlier call for Washington to meet conditions, including recompensing Tehran for the damage caused in the more than five months since the U.S.
and Israel launched strikes on its territory.
"I am likewise demanding compensation from Iran, for all of the people that they have killed and gravely wounded with their roadside bombs and many conflicts, for which they are famous," Trump wrote on his Truth Social service.
The abrupt new U.S. demand was not mentioned in any previous talks. Trump said it would be included in all future negotiations with Iran, and would include calls for payments to families of hundreds of thousands of protesters he said Iran had killed.
He also suggested Iran should compensate "families of those killed on the USS Cole", a reference to the October 12, 2000, attack on that naval vessel in Yemen which killed 17 U.S. sailors, and has been blamed on al Qaeda, not Iran.
Iran had earlier said it was nearing a final pact with Oman defining new shipping lanes between them through the Strait of Hormuz but repeated that the U.S. must meet conditions, including compensation and an end to sanctions and military threats before the key waterway is reopened.
The strait, through which about a fifth of global oil and liquefied natural gas flowed prior to the conflict, has been effectively blocked since the U.S.-Israeli attacks on Iran on February 28, pushing up oil prices and inflation.
Oil prices had jumped 3% after the statement from Iranian Foreign Ministry spokesman Esmaeil Baghaei, as initial optimism about a potential deal over the strait was tempered by Iran's talk of conditions. Brent crude extended gains to trade up 4.25% at 1720 GMT.
Dutch and British front-month gas prices rose more than 10%.
TRUMP UNDER PRESSURE
Trump, who has said the attacks on Iran were aimed at keeping the Islamic Republic from developing nuclear weapons and degrading its ability to threaten the region, is under pressure to end a war that is deeply unpopular at home ahead of midterm elections in November.
Washington and Tehran agreed to a ceasefire in June, but the U.S. reimposed a blockade on Iranian shipping in the Gulf in July, a move that Tehran said violated the truce, which by then had already broken down.
Iranian strikes on Strait of Hormuz shipping have been coupled with increased attacks by its Yemen-based allies, the Houthi rebels, who have targeted ships at another oil chokepoint on the other side of the Arabian Peninsula between the Red Sea and Gulf of Aden.
The Houthis also declared a naval blockade against Saudi Arabia in the Red Sea last month in response to what they said was a Saudi siege on them in Yemen, an allegation denied by Riyadh, which backs Yemen's internationally recognised government.
Fighting has escalated between the Houthis and government forces in Yemen, with the Yemeni military on Monday saying seven people including military personnel and civilians were killed in a Houthi attack on the Red Sea port city of Mocha.
Air defences intercepted and shot down 11 Houthi drones that participated in the attack, the military said.
(Reporting by Nayera Abdullah, Steve Holland, Enas Alashray, Stephanie Kelly. Writing by Sharon Singleton and Andrew Heavens. Editing by Nick Zieminski, Alison Williams and Mark Potter)
