President Donald Trump says the U.S. will stop providing $4 billion in aid each year to Israel in 2027 but will sell arms to its closest ally in the Middle East.

The Republican president told Fox News Channel during a phone call on Tuesday that Israeli Prime Minister Benjamin Netanyahu had approached him about the idea and that they have been talking about it for a couple years.

Iranian deputy foreign minister Kazem Gharibabadi said on Tuesday that Tehran reserved the right to self-defense following U.S. attacks on Qeshm island in the Strait of Hormuz.

"The Islamic Republic of Iran retains the right to legitimate self-defense until the military aggression has been completely and permanently brought to an end," Gharibabadi said according to Iran's ISNA news agency.

Qatar said on Tuesday it remained hopeful that an interim deal could be reached between the United States and Iran as both sides review proposals put forward by mediators including Doha.

In recent days, diplomatic efforts have been underway to prevent renewed fighting after the United States threatened major new strikes -- though U.S. President Donald Trump signaled diplomatic progress with Iran.

The Israeli military said on Tuesday it had no involvement in reported U.S. strikes on an Iranian island, despite Prime Minister Benjamin Netanyahu's recent threats to resume war with Tehran.

Asked if Israel was involved in secret attacks reported by U.S. media outlets on Qeshm Island, which lies in the Strait of Hormuz, an Israeli military spokesperson told AFP, "No".

The Saudi-led coalition fighting Yemen's Houthis said it had intercepted a drone in the region of Mecca, Islam's holiest city, following repeated waves of attacks by the pro-Iran militants on the kingdom.

"Interception and destruction of a drone in the Mecca region," Turki al-Malki, the coalition's spokesman wrote on social media, without elaborating on the source of the attack.

Iran's parliament speaker and chief negotiator in talks with the United States, Mohammad Bagher Ghalibaf, said on Tuesday that the ball was in Washington's court to "prevent war".

"The countries of the region should know that, just as the Islamic Republic of Iran stands ready for battle with its finger on the trigger, it has also given the American side a powerful and rational response," he said in a televised speech. "The ball is now in America's court to prevent war."

U.S. President Donald Trump on Monday signaled progress in talks with Iran to avoid a return to war, as Tehran said "intensive" exchanges were underway while offering to reopen the Strait of Hormuz under strict conditions.

A deal with Tehran "could happen," Trump wrote on his Truth Social platform, a day before crucial U.S. midterm elections. He added that "Iran wants a settlement, as soon as possible."

Jordan's King Abdullah II on Monday said there would be no security in the Middle East region until the Palestinians' right to a homeland is fulfilled.

"We reiterate, time and again, that there can be no security or stability in our region without upholding the Palestinian people's right to their homeland," he said at the opening of Jordan's parliament.

The Middle East is braced for a possible return to all-out war. There are concerns that the United States, along with Israel, could strike Iran shortly after Tuesday's midterm elections in the U.S.

Two Iranian officials said their delegation had left Qatar after days of discussions but that messages with the U.S. continued to be exchanged through the mediator. The officials spoke on condition of anonymity due to the sensitivity of the talks.

U.S. President Donald Trump on Sunday reiterated his threat to resume strikes against Iran, telling a campaign rally that he may have to give Tehran "the hammer" at some unspecified time.

"And the only reason why I'm not finished with Iran is I want to be nice. I want to try and save all those lives if I can...But at some point we're going to have to give them the hammer," the 80-year-old president told supporters during a rally in Iowa ahead of the November 3 midterm elections.