The past week saw the worst flare-up in tensions since the truce started around April 8. Negotiations between Washington and Tehran are bogged down over the fate of billions of dollars of frozen Iranian assets and a parallel conflict between Israel and Iran-backed Hezbollah in Lebanon.

US Central Command said early Sunday it downed two Iranian attack drones that threatened international maritime traffic in the Strait of Hormuz, the waterway crucial to global energy exports that’s also been at the heart of discussions.

On Friday, six ballistic missiles fired at Bahrain and Kuwait were intercepted and another failed to reach their intended target, hours after four unmanned craft headed to Hormuz were shot down, Centcom said. The US struck Iranian coastal surveillance radar sites in Goruk and on Qeshm Island, it added.

Since the US and Israel began hitting Iran on Feb. 28, Tehran and its proxies have launched missile and drone attacks on oil infrastructure, industrial sites and US military facilities across the Gulf. Saudi Arabia, the United Arab Emirates, Kuwait and Bahrain have all sustained damage. 

In Washington, President Donald Trump’s administration is floating a plan to steer Iranian assets frozen in the US toward helping those Gulf allies rebuild from damage inflicted by the Islamic Republic.

Read More: US Floats Steering Frozen Iran Assets to Gulf Allies for Repairs

Tehran, meanwhile, insists those assets be released. The dispute risks derailing the discussions on a truce extension, reopening the Strait of Hormuz and future talks over Iran’s nuclear program.

Iran’s neighbor Pakistan has played a key mediating role. The Islamic Republic’s foreign ministry said on Sunday that Pakistani Interior Minister Mohsin Naqvi met Iran’s top envoy Abbas Araghchi in Tehran and passed along a letter from his premier to Iran’s supreme leader. There were no further details.

Trump, who has insisted for months Iran was near its breaking point, conceded Friday the country retains some missile and drone capacity. In an interview with NBC News, he said about 21% to 22% of Tehran’s missile arsenal remains. 

“It’s a lot of missiles, but it’s not what it was when we first attacked,” he told the television network during a visit to Wisconsin.

Earlier Friday, he told reporters the US is “having great success with Iran,” and “they’re in no position to have a nuclear weapon.” 

The ceasefire saw its biggest test on Wednesday, when Iranian strikes killed one person at Kuwait’s main airport and injured dozens. Bahrain was also attacked and the US struck an oil tanker headed to the Islamic Republic. Kuwait has been one of Tehran’s main targets during the truce. 

Fighting between Israeli troops and Hezbollah continued over the weekend. The Israel Defense Forces said they’d intercepted two projectiles launched from Lebanon into Israel on Sunday.

Hezbollah last week rejected a US-brokered ceasefire between Israel and Lebanon announced by the State Department just hours before.

Iran has demanded a ceasefire in Lebanon before an accord can be reached with the US. A military adviser to Iranian Supreme Leader Mojtaba Khamenei told CNN “the ball is in Trump’s court” when it comes to a deal.

The effective shuttering of the Strait of Hormuz since the start of the war has caused global oil prices to spike, prompting fears of an inflationary wave. Rising fuel costs are a sensitive issue for American voters, threatening to punish Trump’s Republican party at midterm elections due in months. 

The president again downplayed the higher cost of oil on Friday. “People thought it was going to be a lot worse,” he told reporters. “Today I looked at $96 a barrel, people thought that was going to be $300 a barrel.” 

West Texas Intermediate crude ended the week above $90 a barrel and global benchmark Brent closed near $93. While contracts have eased from earlier peaks since the war began on Feb. 28, they remain significantly above levels before the conflict.