New Delhi, July 28 -- WASHINGTON - President Donald Trump stepped back from a new military escalation against Iran last week after Joint Chiefs Chairman Gen. Dan Caine privately warned that the sustained bombing campaign was drawing down American munitions stockpiles at a rate that defense contractors could not match, while back-channel diplomacy around the Strait of Hormuz produced what officials described as the first concrete movement toward a settlement.

The decision to hold off, confirmed to ABC News by sources familiar with White House deliberations, came from a Friday meeting where Caine's warning carried enough weight to pause an administration that had spent 13 consecutive nights striking Iranian military targets. Trump publicly...