Iran and the U.S. harden their positions as Israel says it killed head of Iranian Revolutionary Guard navy

Iran and the United States appeared at an impasse Thursday, with each side hardening its position over talks and setting the stage for another potential escalation in the Middle East war.

Sirens over Israel warned of barrages of incoming Iranian missiles, and Gulf nations worked to intercept fire. Heavy strikes were reported in Iran’s capital and other cities.

In a war that appears defined by who can take the most pain, the U.S. has offered shifting but ambitious objectives, including ensuring Iran’s missile and nuclear programs are no longer a threat and ending Tehran’s support for armed groups in the region. Washington at one point also pushed for the overthrow of Iran’s theocracy.

While the U.S.-Israeli campaign has hit Iran’s military and government hard, killing top leaders and striking scores of targets, Iran continues to fire missiles and there is no sign of an uprising against the government.

For Iran’s leadership, by contrast, merely outlasting the onslaught could be seen as victory. It may be hoping to get the U.S. to back down by roiling the world economy with its stranglehold on the Strait of Hormuz -- raising prices at the pump for drivers, prices in the grocery store for families and costs for businesses the world over.

Short of a negotiated solution, the U.S. would need a dramatic escalation to end Iran’s attacks and restore the free flow of goods through the strait, where 20 per cent of all traded oil and natural gas is transported in peacetime. Iran rejected the U.S.’ demands, while putting forth its own.