(Bloomberg) -- President Donald Trump said Iran will only be able to use funds released from frozen accounts to purchase food and medical supplies from the US, addressing a major hurdle in peace negotiations that both sides say are making progress.

Trump said Iran must use money being unfrozen by the US to buy food exclusively from America but Iran said it is under no such obligation.

Frozen Iranian funds worth $12bn to be released as Israeli troops reportedly gun down Lebanese civilians in the south.

President Trump warned Iran of unspecified actions if it fails to uphold its agreement with Washington, particularly regarding the use of unfrozen funds. Trump stated the money is…