Iran has severed all diplomatic talks with the United States, accusing Israel of violating the ceasefire by bombing its proxy militia Hezbollah in Lebanon.

Iran's top negotiators on Monday stopped exchanging messages with the US through Pakistani intermediaries as Tehran vowed to fully shut down the Strait of Hormuz, according to the Iranian state-affiliated news outlet Tasnim.

The report claims Iran cut off communication because it believes one of the preconditions for the ceasefire was a halt to the IDF's continued attacks on its Hezbollah allies in Lebanon.

The regime says 'No dialogue will take place' until Israel fully withdraws from Lebanon and also stops attacks in Gaza, according to Tasnim.

'Also, the resistance front and Iran have resolved to completely block the Strait of Hormuz and activate other fronts including the Bab al-Mandeb Strait, in order to punish the Zionists and their supporters,' a regime official told state media. 

The Trump administration has spent recent weeks trying to quell the fighting by brokering a temporary ceasefire between Benjamin Netanyahu's government and Lebanon, but those efforts have not succeeded.

Oil markets went into a frenzy following news of the ceasefire's collapse, with crude prices climbing more than six percent.

The closure of the strait, which moves one-fifth of all global oil, has raised gas prices across the globe for months. 

Just hours prior on Monday, Trump claimed that Iran 'really wants to make a deal' and that a comprehensive peace agreement with the regime remains within reach.

'Iran really wants to make a deal, and it will be a good one for the USA and those that are with us,' Trump wrote on X in the middle of the night. 

The Daily Mail has contacted the White House for comment.

The ceasefire's collapse comes after Iran fired missiles and drones at a US airbase in Kuwait, in retaliation for American airstrikes that Washington described as 'self-defense strikes' against the regime's radar and drone command facilities.

Israel remains hesitant to include Lebanon in the ongoing ceasefire with Tehran, viewing that conflict as separate from the broader war.

The US has tried to mediate between Israel and Lebanon over the past few weeks, pushing for a temporary ceasefire while Trump negotiates a long-term peace agreement with Tehran. 

Israeli forces over the weekend captured a strategic site in Lebanon, marking their deepest military incursion into the country in over 26 years. 

Israel captured Beaufort Castle, a medieval fortress in southern Lebanon that it had held until its withdrawal from the country in 2000.

Netanyahu vowed on Sunday to 'deepen and expand' Israel's 'grip' over territory that remains under the control of Hezbollah.

Previously, negotiations between the US and Iran were at a standstill, as both countries were divided over Trump's demand that Tehran completely abandon its nuclear weapons program and surrender its stockpile of enriched uranium.

Trump is attempting to secure a memorandum of understanding (MOU) that would delay official peace negotiations by another two months but result in the immediate reopening of the Strait of Hormuz.