The Australian share market has handed back most of the previous session's gains, after fresh US strikes on Iranian targets rattled ongoing talks between the nations.
The S&P/ASX200 fell 57.3 points by midday, down 0.66 per cent, to 8,660.4, as the broader All Ordinaries slipped 57.8 points, or 0.65 per cent, to 8,888.4.
"Market participants remain optimistic of an imminent breakthrough, despite guarded and sometimes conflicting rhetoric from both the US and Iran," Capital.com senior market analyst Kyle Rodda said.
Oil prices dipped to three-week lows overnight, following reports the two nations were discussing a deal to reopen the Strait of Hormuz within 30 days.
However, US President Donald Trump hit back at the idea Iran and Oman would oversee shipping in the waterway.
