Pete Hegseth claimed the US military is 'locked and loaded' to strike Iran, even as Donald Trump insists his administration is still pursuing a deal with the Islamic regime.

The Defense Secretary said US military remains at the ready to destroy the regime if they choose to not accept a peace deal.

Hegseth warned Iranian senior leadership: 'We are watching you.'

'Remember, this is not a fair fight, and we know what military assets you are moving and where you are moving them to,' Hegseth continued. 'We are reloading with more power than ever before, and even more importantly, better intelligence than ever before. As you expose yourself with your movement to our watchful eye.'

Hegseth vowed the blockade of the Strait of Hormuz would remain in place and warned it would be followed by further military strikes if Tehran failed to reach a deal with the US.

'To Iran, choose wisely. I pray you choose a deal which is within your grasp for the betterment of your people and for the betterment of the world,' Hegseth said. 'In the meantime, the War Department is locked and loaded.'

Hegseth's comments contradicts Trump's claim on Wednesday that the strait is 'permanently open' after secret talks with Xi Jinping, claiming the Chinese leader had agreed to stop arming Iran.

After peace talks with the Islamic regime collapsed over the weekend, the President launched a naval blockade of Hormuz, a critical oil chokepoint through which one-fifth of the world’s supply flows.

Hegseth also appeared to criticize NATO European allies for not assisting the US military with blocking off the strait. 

'You can't live in a world in perpetuity, and this is a message to the rest of the world and our allies, where you just rely on America to continually do the heavy lifting.'

'Oh, Iran might get a nuclear bomb. Who's going to do something about it? America and America only,' Hegseth added. 'Other allies need to invest in their capabilities so they can project power and do basic tasks like clearing a strait.'

Roughly 40 percent of Europe’s jet fuel supply passes through the Strait of Hormuz, along with about 10 percent of the continent’s liquefied natural gas imports.

The blockade has fueled global energy inflation, pushing oil prices above $100 per barrel.

'This is a waterway that the American commerce doesn't use all that much,' Hegseth told reporters on Thursday. 

'We don't rely on the energy coming out of the Strait of Hormuz, but Asia does, and Europe does, and large parts of the rest of the world do, and so their ability to muster a collective defense or a clearing of the straits would be a wonderful thing.'

Despite Hegseth’s claim that the U.S. is not economically reliant on the strait, Trump’s naval blockade has driven gas prices above $4 per gallon nationwide and is beginning to push up the cost of consumer goods.

Iranian diplomats have been in contact with Pakistani mediators in recent days regarding securing a long-term peace agreement with the US. 

Trump has told reporters that Iran will make a deal and that the war is effectively over; however, no final agreement has been reached as the two-week ceasefire approaches its expiration.