By Nayera Abdallah and Jana Choukeir
DUBAI, July 16 (Reuters) - Iran and the United States exchanged intensified fire on Thursday in a week-long escalation that has all but torn up last month's truce, but Iran's release of a U.S. citizen was seen as signalling a path to avert the resumption of all-out war.
For the first time since a memorandum of understanding paused fighting last month, the United States launched two big waves of air strikes in one day on Wednesday, mostly on targets near the coast in southern Iran.