Panama denied a claim made by the State Department on Wednesday that the Central American nation had agreed to no longer charge fees for US government ships to transit the country’s famous canal.

The Panama Canal Authority on Wednesday denied the U.S. State Department's claim that U.S. government vessels would be able to cross the canal without paying fees, likely ratcheting up tensions after President Donald Trump threatened to take back control of the crossing.

As President Donald Trump's second administration continued its swift recasting of the federal government and American foreign policy, the president and his top diplomat issued a stunning proposal, saying the U.S. would "take over" the Gaza Strip, "level the site" and rebuild it.