A fragile ceasefire between the United States and Iran appeared to hold on Tuesday despite renewed military exchanges, even as the United Arab Emirates (UAE) reported fresh missile and drone attacks for a second consecutive day.

US Defense Secretary Pete Hegseth said Washington does not consider the truce broken, stressing that the situation remains under close watch. “We’re not looking for a fight,” he said, adding that the ceasefire “certainly holds” for now despite recent incidents.

Tensions escalated after US naval forces launched operations to escort stranded commercial vessels through the strategically vital Strait of Hormuz under a mission dubbed “Project Freedom.” The US military said it destroyed multiple Iranian boats, drones, and missiles during the operation.

Iran, however, responded by firing missiles at US vessels and launching drone and missile strikes targeting the United Arab Emirates, a key US ally in the region. UAE officials described the attacks as a serious escalation and warned they reserve the right to respond.

Meanwhile, Iranian authorities issued fresh warnings to commercial shipping, urging vessels to remain within designated corridors or face “decisive action.” Conflicting claims have emerged over whether ships have successfully crossed the strait under US escort.

The waterway, which handles a significant share of global oil shipments, remains effectively restricted amid ongoing tensions. Hundreds of commercial vessels are reportedly waiting for safe passage, raising concerns about supply disruptions and rising global energy prices.

Despite the hostilities, US President Donald Trump said Iran is seeking peace, even as public rhetoric remains aggressive. Diplomatic efforts continue, with mediation reportedly underway through regional actors including Pakistan.

The evolving situation underscores the volatility in the Gulf region, where even a limited escalation could have far-reaching consequences for global trade and energy markets.