Pakistan’s army chief is set to meet with Iranian officials in Tehran on Thursday in a bid to ease tensions in the Middle East and arrange a second round of negotiations between the United States and Iran after almost seven weeks of war.

The White House said any further talks would likely take place in the Pakistani capital of Islamabad, though no decision had been made on whether to resume negotiations.

The US naval blockade of Iranian ports continued as US Treasury Secretary Scott Bessent said the Trump administration would ramp up economic pain on Iran with new economic sanctions on countries doing business with it, calling the move the “financial equivalent” of a bombing campaign.

Pakistan has emerged as a key mediator after it hosted direct talks between the US and Iran in Islamabad that authorities said helped narrow differences between the two sides. Mediators are seeking a new round before the ceasefire expires next week.

Meanwhile, Trump wrote late Wednesday on Truth Social that leaders from Israel and Lebanon would speak the next day in a renewed effort to broker a ceasefire after the countries’ first direct talks in decades ended the previous day in Washington without a deal.

It was not clear what leaders Trump was referring to. The Israeli prime minister’s office did not immediately respond for comment, which was posted before dawn in Israel and Lebanon.

The war has jolted markets and rattled the global economy as shipping has been cut off and airstrikes have torn through military and civilian infrastructure across the region. Oil prices have fallen amid hopes for an end to fighting, and US stocks on Wednesday surpassed records set in January.

Officials say US and Iran are making progress

Even as the US blockade on Iranian ports and renewed Iranian threats strained the ceasefire agreement, regional officials reported progress, telling The Associated Press the United States and Iran had an “in principle agreement” to extend it to allow for more diplomacy. They spoke on condition of anonymity to discuss sensitive negotiations.

Iran’s foreign minister, Abbas Araghchi, took part in a preliminary meeting Wednesday with Asim Munir, Pakistan’s army chief of staff, Iranian state media reported.

But even as mediators worked for peace, tensions simmered.

The commander of Iran’s joint military command, Ali Abdollahi, threatened to halt trade in the region if the US does not lift its naval blockade, and a newly-appointed military adviser to Iranian Supreme Leader Mojtaba Khamenei said he doesn’t support extending the ceasefire.

Mediators seek compromise on sticking points

Mediators are pushing for a compromise on three main sticking points that derailed direct talks last weekend — Iran’s nuclear program, the Strait of Hormuz and compensation for wartime damages, according to a regional official involved in the mediation efforts.

Iranian Foreign Ministry spokesman Esmail Baghaei said Iran is open to discussing the type and level of its uranium enrichment, but his country “based on its needs, must be able to continue enrichment,” Iranian state media reported.

The fighting has killed at least 3,000 people in Iran, more than 2,100 in Lebanon, 23 in Israel and more than a dozen in Gulf Arab states. Thirteen US service members have also been killed.

China calls for Strait of Hormuz to reopen

Chinese Foreign Minister Wang Yi said the window of peace was opening during a phone call with his Iranian counterpart, who briefed him on the latest developments in Iran-US negotiations and Tehran’s considerations on the next step, according to a statement from China’s foreign ministry late Wednesday.

Wang told Araghchi that the situation has reached a critical juncture between war and peace, and said Iran’s sovereignty, security, and legitimate rights should be respected as a littoral state of the Strait of Hormuz, while freedom of navigation and safety through the strait should be ensured.

Since the war began, Iran has curtailed maritime traffic through the Strait of Hormuz, which a fifth of global oil transited through in peacetime. Tehran’s effective closure of the strait sent oil prices skyrocketing, raising the cost of fuel, food and other basic goods far beyond the Middle East, and the US has responded with a blockade on Iranian shipping.

US Central Command said Wednesday that no ships had made it past the blockade since it was imposed two days earlier, while 10 merchant vessels complied with direction from US forces to turn around and reenter Iranian waters.

The blockade is intended to pressure Iran, which has exported millions of barrels of oil, mostly to Asia, since the war began Feb. 28.

Much of it has likely been carried by so-called dark transits that evade sanctions and oversight, providing cash that’s been vital to keeping Iran running.

Strikes continue in Lebanon after Washington talks

Meanwhile, Israel pressed ahead with its aerial and ground war in Lebanon. The country’s National News Agency reported airstrikes and artillery shelling throughout southern Lebanon on Wednesday, including near Bint Jbeil, where Israeli forces have encircled Hezbollah fighters.

Israeli Prime Minister Benjamin Netanyahu said Israeli troops were about to “eliminate this great stronghold of Hezbollah” and would continue expanding control of areas in southern Lebanon.

Netanyahu said negotiations are continuing, with disarming Hezbollah a key goal.

The Lebanese Health Ministry said Israel struck three teams of paramedics Wednesday in southern Lebanon, first hitting one team and then two more that rushed to help. The attacks killed three paramedics and wounded six others, the ministry said.

The Israeli military did not immediately respond to a request for comment.

Israel and Lebanon have technically been at war since Israel was established in 1948, and Lebanon remains deeply divided over diplomatic engagement with Israel.