Iran's Supreme Leader Mojtaba Khamenei warned officials on August 28 that public discussion of Iran's worsening economic conditions should be avoided, a step intended to curb domestic frustration. President Masoud Pezeshkian reiterated the severity of the economic situation, linking it to the war, U.S. sanctions, and a naval blockade, while the intelligence ministry announced the arrest of 30 individuals accused of leading the December‑January protest movement.

The Institute for the Study of War and the Critical Threats Project publish daily updates on the war with Iran, with Monday briefings covering weekend events. The Telegram message also cautioned against binary statements such as "war or negotiation" and "compromise or warmongering" and urged officials to preserve social cohesion.

The intelligence ministry's announcement marked the first large‑scale arrests related to the recent protest wave in several months. The United States rejected a proposal by five Iran‑backed Iraqi militias to pause operations for two years instead of fully disarming, calling the suggestion a "trick." Iraqi Kurdish media reported that U.S. officials described the proposal as a deceptive maneuver. Prime Minister Ali al Zaydi has faced pressure from the United States to disarm the militias, which have been accused of attacks on U.S. and foreign targets.

Basij commander Hossein Taeb emphasized during a meeting in Qom that bazaar merchants have helped maintain social stability and prevent shortages during recent wars, a comment that highlights the regime's focus on groups previously linked to protest mobilization. Taeb's appointment as Basij commander in August 2025 tasked him with expanding the Basij's public information network and outreach to neighborhoods and mosques.

The United States imposed sanctions on an Emirati branch of Banque Misr, the general manager of Bank Melli's Dubai branch, and Hong Kong‑based Kameng Trading Limited, alleging connections to Iranian shadow‑banking networks. The sanctions followed the UAE's August 18 decision to suspend all trade and financial transactions with Iran, a move ISW‑CTP said would further weaken Iran's already deteriorating economy.

In Lebanon, Hezbollah‑linked social service organizations continued to distribute aid to civilians in pilot zones under the June 26 Trilateral Framework Agreement, while Lebanese officials expressed concern about potential conflict with Hezbollah during disarmament efforts, underscoring a diplomatic stalemate with Israel over the agreement's implementation.

In Iraq, an Asaib Ahl al‑Haq parliamentary member announced that a delegation will travel to Iran to negotiate the passage of Iraqi oil tankers through the Strait of Hormuz, seeking to offset revenue losses from reduced Strait usage. U.S. Central Command reported that nearly 1,500 vessels have received assistance transiting the strait, indicating that maritime traffic remains open despite Iranian attempts to restrict it. The Iraqi Supreme Court ruled that the prime minister may remove "negligent and incompetent" officials with parliamentary approval, a decision tied to Prime Minister al Zaydi's anti‑corruption campaign and efforts to consolidate power; the court stressed that the ruling should not be used to punish disloyal officials.