By Bo Erickson, Nayera Abdallah and Elwely Elwelly
WASHINGTON/DUBAI, July 27 (Reuters) - President Donald Trump said on Monday that the United States was having "good talks" with Iran and there was a chance of a deal over their conflict, but warned U.S. strikes would resume if the negotiations failed to deliver.
Washington abruptly suspended a two-week campaign of air strikes against Iran on Saturday in the president's latest strategic U-turn in the five-month-old conflict.
"We're talking right now,"
Trump told reporters aboard Air Force One. "We're having good talks... I think there's a good chance that something could happen, and if it does, good, if it doesn't, we go back to doing what we were doing two days ago."
In contrast to the president's remarks, Tehran appeared to quickly test the pause in the U.S. military campaign, with Saudi Arabia, Jordan and Iraq reporting drone attacks on Monday.
Saudi Arabia said it shot down drones aimed at petroleum targets, including in the capital Riyadh. It said the drones had been launched from Iraq by Iran-backed armed groups, and it reserved the right to respond.
Separately, Iran's Houthi allies in Yemen said they had targeted the 1,200-km (745-mile) East-West Pipeline carrying oil to Saudi Arabia's main Red Sea port of Yanbu, in retaliation for what they said were Saudi drone incursions into Yemeni airspace.
Iran has said it is not seeking to resume peace talks with the U.S., although it would pause its own attacks for as long as Trump's self-imposed ceasefire continues.
Tehran also said it was still in control of the contested Strait of Hormuz, the key waterway for global energy supplies which Trump has demanded vessels be able to pass through freely.
(Additional reporting by Muayad Hameed in Iraq. Writing by Peter Graff; Editing by Sharon Singleton, Toby Chopra, Mark Potter and Cynthia Osterman)
