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But Secretary of State Mike Pompeo says the U.S. government's policy on Iran is to avoid war, despite Houthi threats of further attacks against Saudi Arabia.

"Foreign forces can cause problems and insecurity for our people and for our region", Rouhani said in a televised speech at an annual military parade, adding Iran would present to the United Nations a regional cooperation plan for peace. European nations, including Britain, still adhere to an worldwide deal created to limit Iran's nuclear ambitions, but Trump has pulled the US out of the agreement.

The crude oil rates saw on of its biggest single-day jump on September 16 after Saudi Arabia drone attack.

While Yemen's Iranian-allied Houthi rebels claimed the assault, Saudi Arabia says it was "unquestionably sponsored by Iran".

What has Mr Rouhani said?

As Iran carried out military parades to commemorate the anniversary of the start of the Iran-Iraq war in 1980, its president said he planned to extend "the hand of friendship and brotherhood" to global powers.

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"When they stood by the side of the people of Iraq, Syria, Palestine, and Lebanon, they brought security to those lands and managed to root out savage terrorists in the region", the president said.

He said: "They should not make our region the site of an arms race".

The PM said he would "follow very closely" American proposals to do more to defend Saudi Arabia, with Tehran's ire being further provoked by the US-led coalition patrolling the region's waterways.

What about his peace initiative?

Oil prices rose after President Trump, arriving in NY for the meeting of the United Nations General Assembly, said he meant to seek support for a coalition to confront Iran after the USA blamed it for last week's strike on a Saudi Arabian oil facility.

However, he gave no details, saying only that peace in the Strait of Hormuz could be achieved "in co-operation with various countries".

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Rouhani also promised to unveil a regional peace plan at the upcoming United Nations meetings. More information about the deployment will be determined in the coming days, but it wouldn't involve thousands of USA troops, according to Gen. Joseph Dunford, chairman of the Joint Chiefs of Staff.

"In this regard, we are even ready to forgive their past mistakes, because today we are faced with conditions in which the enemies of the region, particularly the USA, the arrogance and the Zionism, are seeking to exploit the gap, rift, and division among the regional countries", the president said. Be careful, a limited aggression will not remain limited.

The Houthis have repeatedly said they were behind the oil attacks, the Saudis have repeatedly blamed Iran and Tehran has repeatedly denied any involvement.

Saudi Energy Minister Prince Abdulaziz bin Salman and the chief executive of state oil company Aramco, Amin Nasser, have said the output will be fully back online by the end of September.

He said his administration has about 15 meetings arranged "but Iran is not one of them".

Oil prices rose to their highest in two sessions on Monday amid concerns about oil supply disruptions from Saudi Arabia and elevated tensions in Middle East.

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