US President Donald Trump expressed renewed optimism on Tuesday morning over negotiations with Iran, saying that there was a "good chance” of signing a deal in “two or three days".

“We’re very close to having a very, very good, strong, powerful deal,” Trump said, as the Middle East was still reeling from Iran and Israel exchanging fire the previous day in the biggest blow yet to the strained truce in the Iran war.

“If we go and bomb — which we could do very easily if we want, and we spend another two or three weeks bombing — they’ll have nothing left whatsoever. But you won’t have the Strait (of Hormuz) open for months.”

“If we do the bombing, you know, a lot of people are going to be killed. Who wants to do that? I don’t," the US president told journalists at John F Kennedy International Airport in New York after watching the NBA Finals on Monday night.

Trump did not provide any details on why there was reason for renewed optimism.

Mediators, led predominantly by Pakistan, have been trying for weeks to get a deal across the line. However, both Iran and the U.S. have taken hard-line positions.

The US wants to see Iran give up its stockpile of highly enriched uranium, which is believed still to be entombed in the country after American airstrikes in the 12-day conflict in 2025.

Iran is refusing that and demanding relief from sanctions. It also wants the release of frozen assets even before a final agreement is in place, something rejected by Trump.

Apache down near Hormuz

Meanwhile, a US Army Apache attack helicopter crashed near the Strait of Hormuz, with Trump saying the two crew members on board were “fine” after the incident involving the strategic waterway, which remains under Tehran's chokehold.

What caused the crash remained unclear Tuesday morning. Iranian state media, relying on foreign reporting, acknowledged the crash without elaborating.

Since the US and Israel began striking Iran on 28 February, the war has shaken the global economy, driven up energy prices around the world and made many basics, including food, more expensive.

Officials have been unable to turn the April ceasefire into a deal to permanently end the war, particularly as Israel intensifies and expands its military campaign in Lebanon against the Iranian-backed militia Hezbollah.

Trump acknowledged the crash, stating that “The pilots are fine, yeah." “Nobody injured. We are going to issue a report tomorrow. But the pilots are fine.”

Apache helicopters have been a key asset for the US military as it enforces a blockade on Iranian crude oil shipments and tankers, seeking to pressure Tehran into reaching a deal.

The helicopters have also been used by the United Arab Emirates to shoot down Tehran's drones during the Iran war.

Hezbollah war still threatens US-Iran deal

Previously, Israel and Iran appeared to back away from further strikes late on Monday, hours after they traded fire for the first time since the US agreed to a ceasefire with Tehran two months ago. Both countries warned that they were ready to launch retaliatory attacks if provoked.

The renewed hostilities raised concerns that the Middle East could plunge back into a full-scale war. The new attacks prompted Trump to call for an immediate stop to fighting between Israel and Iran.

Soon after, the Iranian military’s joint command issued a statement that said it was halting offensive strikes. The statement said further “aggression and hostile acts” by Israel and its supporters, including in southern Lebanon, would be met with “much more severe and crushing measures than before.”

Israeli Prime Minister Benjamin Netanyahu, speaking in a videotaped statement, implied that the current round of fighting was over. But he also warned that if Iran “makes the mistake and returns to attacking us, we will respond with force.”

Netanyahu said Israel is continuing to operate in Lebanon against the Iranian-backed militant group Hezbollah, and that Israel “has full right to self-defence, and we will exercise it to the full extent necessary.”

Meanwhile Tuesday, the Israeli military issued an evacuation warning for Lebanon’s southern port city of Tyre, including the Christian quarter, which has so far been spared in the destructive airstrikes on the port city.

Last week, Israel warned residents of Tyre that it believed Hezbollah members were among them. Many Lebanese civilians fled to those areas as Israeli strikes hammered the Mediterranean coastal area over the past two weeks.

After last week’s warning, the Lebanese army deployed to the Christian district of Tyre in an effort to prevent Israeli attacks there and to show that Hezbollah has no armed presence in the area.

But Avichay Adraee, the Israeli military’s Arabic-language spokesperson, posted on X on Monday that the Israeli military “will have to act against their terrorist activities in the neighbourhood soon.”