I put my wife in iddah two months ago and we had an intimate encounter last week but we did not have intercourse. I want to know if an intimate encounter without intercourse breaks the iddah or not.
According to quran, The only reason for the iddet is to clarify what is in the womb. If a child is delivered the next day of iddet then it ends. Since you did not do anything that does not change this situation then the iddet continues.
The other thing to note is that would you really want to continue it since there is obviously affection between you two. The last thing that Allah wants is to break a family. You should get back to her and start building your life.
Listen brother, I don't know how you get the information about this or who told you what. But you're wrong in many aspects! How? Let me clarify this.
When is female in Iddah
First thing to note is that a wife is never in Iddah, a female is in Iddah. When she is a wife she never has to face this situation. Iddah is a situation when a female's husband is dead or divorces him.
What is Iddah for
Iddah is a term used for a female who is given a time to stay away from any male. Why? Iddah is generally used to let anything that is inside her womb to show its symptons; pregnancy. If she is pregnant, the family of her ex-husband needs to take care of that child otherwise she is allowed to marry other person on her desire.
You said that you were having an intimate time with your wife? That is total confusion for me. Because if she is your wife then she isn't in iddah, if she is in iddah then she is not your wife.
Now come two points. If she is not your wife, and you're still intimate with her then you're doing zina; since you have no right on her. But if she is your wife, then how do you say she is in iddah.
However the only answer here would be that you need to wait for the time when she is out of this period. Then you can be intimate; you'll have right on her too. But till then, just wait and be patient.