It's TACO Tuesday as Trump presses pause. Here's what you should know

A firefighter hoses down rubble at a residential building in Tehran. (AP Photo/Vahid Salemi)

G'day. ABC Middle East correspondent Matthew Doran here, writing to you from Beirut.

I'm bringing you a daily wrap up of the latest on the war engulfing the Middle East – today is day 24 of the conflict.

Iran war live updates: Is an Australian spy base being used in US/Israeli air strikes?

Here's what you need to know today:

Here's what all that means

There’s a term coined by those working in financial markets that continues to gain prominence: TACO – Trump Always Chickens Out.

Unsurprisingly, it's a phrase the president bristles at. But once again, it’s being bandied around in the wake of his decision to back away from his threat to start bombing Iranian power stations.

Mr Trump had given Tehran 48 hours to open the Strait of Hormuz, without any restrictions, or he would “obliterate” the facilities. In response, Iran said it would attack energy and critical infrastructure across the Middle East. Cue some frantic back-channelling by regional players — given everyone is very concerned about further escalation — and Mr Trump has said Iran is talking to Washington, with a deal in the offing very soon.

Iranian state media, also unsurprisingly, is suggesting Mr Trump is on the back foot and looking for ways out of this war. And the speaker of the country's parliament said there had been no talks held.

"Fake news is used to manipulate the financial and oil markets and escape the quagmire in which the US and Israel are trapped," Mohammad Baqer Qalibaf posted on X.

There's little doubt both sides are playing to their domestic audiences. Both arguments could also have some truth to them. In this war so far, we've seen how barrages of missiles have been accompanied by intense propaganda. Selling the war is often just as heavy a task as conducting it – perhaps even harder, at times.

The markets have certainly responded positively – whether it's a TACO or some other outcome.

Whether Israel toes the Trump line remains to be seen. The US president has considerable sway over Prime Minister Benjamin Netanyahu. But the latter has also been accused of going rogue in recent days, including by Mr Trump himself when Israel attacked Iran's South Pars gas field.

Israel and the US are conducting major air strikes across Iran and Israel is continuing its attacks through Lebanon too. We got a sense of that overnight, during a brief foray into the Hezbollah stronghold suburb of Dahiyeh, in south Beirut.

The Iranian-backed militant group tightly controls media access to the area, considered a terrorist organisation under Australian law. We were watched very closely by a man on a scooter, making sure we only ventured to certain areas in one corner of the suburb.

The damage we witnessed was extensive. One multi-storey building had been razed. A bobcat was being used to start some of the clean-up – a scene which seemed akin to bailing out the Titanic with a bucket.

Our time inside the "red zone", the area Israel has demanded people leave from or risk being caught in future strikes, was brief. But it was remarkable to see how many people were still in the suburb, driving and riding past us. Some refuse to leave. Others have nowhere to go.

Israel insists Hezbollah is a grave threat to its north – and Israelis in the upper Galilee were told to stay near shelters for part of the afternoon on Monday, with the IDF fearing multiple Hezbollah rocket attacks.

The IDF has been forced to concede that a man killed on the Israeli side of the border on Sunday local time, whose death was attributed to a rocket from Lebanon, was actually killed by Israeli artillery fire.

It is rare to see such a concession from Israel — even more so given how soon after the event it was.

And here's the impact on Australia