Iran postponed a round of technical negotiations with the United States that had been due to take place over the weekend, citing the recent military clashes and uncertainty over whether key conditions of the war-ending memorandum would be implemented, an Iranian official said, Entekhab reported on June 28.

The postponement is the clearest diplomatic casualty yet of an escalation that has pushed the ceasefire to the brink, after the two sides traded military strikes across the Persian Gulf in the most serious breakdown since the war ended. The round had been due to be held in Switzerland.

Mehdi Fazaeli, a member of the office for "preserving and publishing the leader's works", said the technical talks had been due to take place but that Iran had cancelled them and not attended, because of the clashes of recent nights.

A further reason was that Iran was waiting to see whether some conditions would be implemented, such as whether it would be able to withdraw its frozen funds, he said.

The Wall Street Journal earlier reported, citing informed sources, that the round was due to be held in Switzerland over the weekend but was halted by the recent fighting.

The diplomatic freeze follows two days of escalation that our coverage has tracked. The United States struck Iranian coastal sites on June 27 in response to a drone attack on a tanker in the Strait of Hormuz, and Iran's Islamic Revolutionary Guard Corps fired ballistic missiles and drones at US bases at Ali al-Salem in Kuwait and the Fifth Fleet at Port Salman in Bahrain in retaliation.

Kuwait and Bahrain confirmed they had been targeted, with a residential building damaged in Bahrain's Muharraq governorate, and said they had intercepted incoming projectiles. The Gulf Cooperation Council condemned the Iranian strikes as a violation of international law.

Iran and the United States signed the Islamabad memorandum on June 17 to reduce tensions and begin new negotiations, setting a 60-day window for a permanent deal.

The first clause commits both sides and their allies to an immediate and permanent end to military operations on all fronts, including Lebanon.

The agreement also provided for the release of $12bn in frozen Iranian funds in two tranches, the lifting of oil sanctions pending a final deal, and a direct communication line between Tehran and Washington.

Each side has accused the other of breaching the memorandum, Washington citing the attack on shipping in the strait and Tehran condemning the US strikes on its territory.

Donald Trump posted on social media on June 27 that the US had struck Iranian targets, saying: "United States aircraft just struck Iranian missile and drone storage locations, and coastal radar sites, for violating the Cease Fire Agreement, AGAIN!"

He added, "It is very possible that they will never learn! There may come a point when we are no longer able to be reasonable, and will be forced to militarily complete the job that we very successfully started. If that happens, the Islamic Republic of Iran will no longer exist! President DJT."