Iran said it had received a formal US response to its proposal to end the war. The update came as Gulf oil flows recovered, Gaza strikes persisted and regional tensions reshaped trade and security.

Iranian officials said they had received an official US response to Tehran's proposal to end the seven-month war, though they did not say whether it amounted to a rejection. The development came days after US President Donald Trump publicly dismissed the plan. At the same time, oil and fuel exports from the Gulf were said to be nearing prewar levels through alternate routes, while Israeli Prime Minister Benjamin Netanyahu said a FlyDubai co-pilot stabbed the pilot on an Israel-bound flight and then apparently tried to crash the aircraft before passengers and crew overpowered him and the plane landed safely in Saudi Arabia.

Elsewhere in the region on Wednesday, Israeli strikes in Gaza killed five Palestinians and wounded 19, hospital officials said. The US military said it had completed the withdrawal of its troops from Iraq, Egypt said the Suez Canal had lost USD 20 billion in revenue since the Gaza war began, and Saudi Crown Prince Mohammed bin Salman said the kingdom was capable of deterring all threats.

In Gaza, officials at Shifa Hospital said an Israeli strike killed a woman and critically wounded her husband in Gaza City, while another strike hit a bus, killing four people and wounding at least 14. Officials at Nasser Hospital said a strike in Khan Younis wounded four Palestinians. Israel's military did not immediately respond to questions about the bus strike, but said it was reviewing information about the strike in Khan Younis.

Hospital officials said the attacks were the latest in nearly daily strikes since Israel and Hamas agreed to a ceasefire nearly a year ago, which halted the heaviest fighting. According to Gaza's Health Ministry, Israeli airstrikes have killed more than 1,400 Palestinians since the ceasefire. Over the same period, five Israeli soldiers have been killed in militant attacks and two others were killed by friendly fire. In Gaza City, hundreds of mourners also held a vigil for 105 people killed during the war whose bodies were recovered in recent days from the rubble of buildings destroyed in Israeli strikes.

The US military said it had completed the withdrawal of its troops from Iraq, ending a 12-year mission against the Islamic State group. Baghdad described the move as a sign of the country's growing strength and sovereignty. Iran-backed groups welcomed the withdrawal, while some other Iraqis, especially in the Kurdish region, expressed concern. Trump wrote on social media that it "marks the end of a very expensive excursion into Hell." He added, "It has been a long time, with very bad decision-making that got us involved in this quagmire in the first place, but soon, that will be part of History." Oil and fuel exports from the Gulf have moved closer to prewar levels with the help of alternate routes and a US-protected passage through the Strait of Hormuz, according to Kpler. During a podcast on Tuesday, the data firm said shipments through the Red Sea and the Suez Canal, along with a pipeline to Fujairah on the Gulf of Oman and a route that guides tankers at night, had helped offset disruptions caused by the threat of Iranian attacks in the Strait of Hormuz. Kpler said about 21.8 million barrels a day of crude and fuel products made from crude are being shipped weekly on average, against a prewar baseline of 23.3 million barrels a day. "We are not at pre-conflict levels, but we are getting close to there," said Matt Smith, Kpler's director of commodity research, while noting that the workarounds remained time-consuming and costly.

In Saudi Arabia, Crown Prince Mohammed bin Salman said the kingdom had the human and military capacity to deter its enemies as it remained involved in a proxy conflict with Iran-backed Houthi rebels in Yemen. Speaking at the inauguration of a new session of the unelected advisory Shura Council, he said, "Your country possesses highly efficient human and military capabilities, capable -- by the grace of God Almighty -- of repelling threats and deterring them completely, regardless of their sources." The Houthis have recently captured the port city of Mokha and several Red Sea islands, pushing their reach closer to the Bab el-Mandeb Strait, through which around 12 per cent of global trade passes. Along with allied militias in Iraq, they have also attacked Saudi oil facilities and tried to stop Saudi tankers from using the strait, disrupting the kingdom's oil exports.

With PTI Inputs