JD Vance suggested Israel may not be on board with a US-Iran peace deal as he was grilled over bombshell intelligence reports claiming Benjamin Netanyahu's spy agencies have been eavesdropping on American negotiators. 

US intelligence officials are alarmed by Israel's eavesdropping on American diplomats negotiating with Iran. The Pentagon now ranks Israel as a bigger counterintelligence threat than some of America's enemies, according to The New York Times.

The report details concerns that Israel has been spying on senior Trump officials, including the President's top negotiator Steve Witkoff and Pentagon policy chief Elbridge Colby, along with other American military and government personnel.

Fox News anchor Jesse Watters grilled Vance over the spy threat Israel poses to the US, asking how concerned he was about the country eavesdropping on America. 

Vance acknowledged that the US and Israel share plenty of interests, but conceded there are situations where those interests diverge. 

'I think obviously the Israelis and the United States, we have a lot of shared interests, but we also have some situations where our interests diverge,' Vance replied, refusing to address the spy allegations. 

Vance then noted that Trump's main objective in Iran is to ensure that they do not acquire a nuclear weapon. He went on to admit Israel may not like the emerging deal. 

'I think that he's right, that we can get the long-term settlement to Iran's nuclear deal,' Vance continued. 'Now, Israel may like that, they may not like that, but fundamentally, we think this is in the best interest of the United States of America.' 

In recent days, Israel and Iran have traded missile fire and accused the other of violating the fragile ceasefire brokered by Trump.

Iran launched strikes on Israel on Sunday, calling Israeli attacks on Beirut a flagrant breach of the truce and tying the fighting in Lebanon to its wider confrontation with the United States.

In response, Israel launched airstrikes early Monday on military and economic targets across Iran, with explosions reported in Tehran, Isfahan and other cities.

Netanyahu said he had ordered the strikes after Iran attacked Israel in support of Hezbollah, but declared he would halt the assault while warning that any fresh Iranian attack would be met with force.

Trump, meanwhile, has pressed Netanyahu to stop escalating against Tehran and Lebanon, reportedly threatening to pull US support for Israel if strikes blow up the Iran deal, which he says is only days away.

The central demands the US is pressing Iran to accept are that it abandon its pursuit of a nuclear weapon and surrender its stockpile of enriched uranium.

The regime, however, wants control of the Strait of Hormuz, the lifting of the US blockade on its ports, and an end to the fighting in Lebanon between Hezbollah and Israel. 

Regarding the spy allegations, the Israeli embassy categorically denied The New York Times' claims by insisting the country does not spy on American officials or entities and poses no threat to the US.

One senior Trump administration official told the outlet that the Israeli intelligence collection on US officials since the start of the President's second term has been 'unhinged.'

Two senior US military officials told the Times that American personnel serving in Israel or with Israeli counterparts were aware of the counterintelligence threats.