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IRAN said on Wednesday it was reviewing a new United States peace proposal aimed at formally ending the conflict between the two countries, as President Donald Trump claimed negotiations had made significant progress despite major unresolved disputes over Tehran’s nuclear activities and control of the Strait of Hormuz.
Reuters reported on Thursday that the latest diplomatic push has fuelled cautious optimism in global markets, with oil prices falling sharply and investors betting on the possibility of a ceasefire agreement after months of escalating confrontation.
An Iranian foreign ministry spokesperson, quoted by the ISNA news agency, said Tehran would study the proposal before delivering its response.
In Washington, Trump struck an upbeat tone following what he described as productive discussions over the past day.
“They want to make a deal. We’ve had very good talks over the last 24 hours, and it’s very possible that we’ll make a deal,” Trump told reporters in the Oval Office.
His remarks contrasted with a more confrontational message issued earlier on Truth Social, where he warned he could resume the US bombing campaign against Iran and described the prospect of Tehran accepting the latest proposal as “a big assumption”.
The war, which began on February 28, has destabilised energy markets and intensified geopolitical tensions across the Gulf region.
Central to the dispute are Iran’s nuclear ambitions and the future of the Strait of Hormuz, a critical maritime corridor that handled roughly one-fifth of global oil and gas shipments before the conflict erupted.
Sources familiar with the mediation effort said negotiators were close to finalising a one-page memorandum that would formally halt hostilities and launch broader negotiations on reopening the strait, easing sanctions on Iran and imposing restrictions on Tehran’s nuclear programme.
According to the sources, the talks are being facilitated with support from Pakistan, while Trump’s envoy Steve Witkoff and presidential adviser Jared Kushner are leading the US side.
If approved, the memorandum would trigger a 30-day period of intensive negotiations aimed at securing a comprehensive settlement.
However, the proposed framework reportedly leaves unaddressed several of Washington’s long-standing demands, including restrictions on Iran’s missile programme, the dismantling of Tehran-backed proxy networks across the Middle East and the fate of Iran’s stockpile of more than 400 kilograms of highly enriched uranium.
Iranian officials reacted cautiously to reports that an agreement was close.
Ebrahim Rezaei, spokesperson for the Iranian parliament’s foreign policy and national security committee, dismissed the proposal as “more of an American wish-list than a reality”.
Parliament Speaker Mohammad Baqer Qalibaf also ridiculed suggestions of an imminent breakthrough, posting in English on social media: “Operation Trust Me Bro failed.”
He accused Washington of attempting to create favourable headlines after failing to restore shipping access through the Strait of Hormuz.
Meanwhile, Israeli Prime Minister Benjamin Netanyahu said he and Trump remained aligned on preventing Iran from developing nuclear weapons capability.
Netanyahu said both leaders agreed that all enriched uranium must be removed from Iran. Tehran has consistently denied seeking to build a nuclear bomb.
Financial markets reacted swiftly to the possibility of de-escalation. Brent crude futures plunged by as much as 11 per cent to two-week lows before recovering slightly above the US$100-a-barrel mark. Global equities rose sharply while bond yields declined amid expectations that energy supplies could stabilise if a peace agreement is reached.
The diplomatic momentum follows Trump’s decision on Tuesday to suspend a naval mission intended to reopen the Strait of Hormuz after citing progress in negotiations.
NBC News reported that Saudi Arabia had privately opposed the operation and temporarily restricted the United States military from using Saudi bases or airspace for the mission.
According to the report, Saudi officials were angered by Washington’s announcement that US forces would escort commercial vessels through the strait. A subsequent phone call between Trump and Crown Prince Mohammed bin Salman reportedly failed to resolve the disagreement.
The White House did not immediately comment on the report.
Despite the diplomatic efforts, military tensions in the region remain high. US Central Command said American forces fired on an Iranian-flagged tanker on Wednesday after the vessel allegedly attempted to breach the ongoing blockade while heading towards an Iranian port. - May 7, 2026
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