US President Donald Trump has rejected Iran’s response to a US-backed peace initiative, sharply reducing prospects for a near-term breakthrough in negotiations aimed at ending the 10-week regional conflict that has rattled global energy markets and threatened maritime security in the Gulf.
In a post on Truth Social on Sunday, Trump dismissed Tehran’s proposal outright, writing: “I don’t like it — totally unacceptable,” without elaborating further. The remarks came only hours after Iranian state media released details of Tehran’s response to a recent American proposal intended to revive diplomatic talks.
Reuters cited on Monday that oil prices immediately climbed by around US$3 a barrel as traders reacted to the collapse in momentum towards a settlement.
According to Iranian media reports, Tehran’s proposal centred on ending hostilities across the region, particularly in Lebanon, while also demanding guarantees over the safety of shipping through the Strait of Hormuz.
Iran additionally called for compensation for war-related damage, recognition of its sovereignty over the strategic waterway, the lifting of sanctions and an end to US restrictions on Iranian oil exports.
The semi-official Tasnim news agency said Iran also demanded that Washington end its naval blockade and provide assurances against any future military strikes.
The US proposal had reportedly sought first to secure an end to active fighting before opening negotiations on more contentious matters, including Iran’s nuclear programme.
The Wall Street Journal, citing unnamed sources, reported that Iran had indicated a willingness to dilute part of its highly enriched uranium stockpile while transferring the remainder to a third country as part of a possible diplomatic compromise.
Pakistan, which has been acting as an intermediary during the crisis, forwarded Tehran’s response to Washington, according to a Pakistani official familiar with the discussions.
Although a fragile ceasefire has technically been in place for around a month, security concerns across the Gulf remained acute on Sunday after hostile drones were detected over several countries in the region.
The United Arab Emirates said it intercepted two drones originating from Iran, while Qatar condemned a drone strike targeting a cargo vessel travelling from Abu Dhabi through Qatari waters. Kuwait also confirmed that its air defence systems had engaged hostile drones entering its airspace.
Despite continuing instability, maritime traffic through the Strait of Hormuz showed tentative signs of recovery.
Shipping analytics firm Kpler reported that the QatarEnergy-operated LNG carrier Al Kharaitiyat safely transited the strait en route to Pakistan’s Port Qasim. The vessel became the first Qatari liquefied natural gas tanker to pass through the waterway since the conflict involving the United States and Israel escalated on 28 February.
Sources said Iran had approved the shipment as a confidence-building gesture towards both Pakistan and Qatar, which have each played mediation roles during the crisis.
Iranian media also reported that a Panama-flagged bulk carrier bound for Brazil had successfully crossed the strait using a maritime route designated by Iran’s armed forces after an earlier failed attempt on 4 May.
The Strait of Hormuz remains one of the world’s most strategically important shipping lanes, previously carrying roughly one-fifth of global oil supplies before the conflict severely disrupted traffic.
Trump, who is due to visit China this week, is facing mounting international and domestic pressure to bring the crisis under control amid fears of a wider economic shock driven by surging energy prices.
Addressing the state of military operations against Iran, Trump said: “They are defeated, but that doesn't mean they're done.”
Israeli Prime Minister Benjamin Netanyahu likewise insisted the conflict was not yet over, declaring that there was “more work to be done” to dismantle Iran’s enrichment infrastructure, remove enriched uranium stockpiles and address Tehran’s missile capabilities and regional proxy networks.
Speaking to CBS News’ “60 Minutes”, Netanyahu said diplomacy remained the preferred route for removing Iran’s enriched uranium, although he declined to rule out military action.
Iranian President Masoud Pezeshkian responded defiantly, writing on social media that Iran would “never bow down to the enemy” and would “defend national interests with strength”.
Fighting has meanwhile continued beyond the Gulf itself. Clashes persisted in southern Lebanon between Israel and the Iran-backed militant group Hezbollah despite a US-brokered ceasefire announced on 16 April.
The latest escalation began on 2 March when Hezbollah launched attacks following joint US-Israeli operations against Iran. New talks involving Israel and Lebanon are scheduled to begin in Washington on 14 May.
The conflict has also generated growing political difficulties for Trump at home. Rising petrol prices and concerns over a prolonged military confrontation have fuelled criticism from Democrats ahead of congressional elections later this year.
US Senator Jack Reed, the senior Democrat on the Senate Armed Services Committee, criticised the administration during an appearance on Fox News, saying: “This is a situation that has been made much worse by the actions of Donald Trump, and now he's floundering around trying to figure out a way to get out of it.”
Efforts to establish an international naval mission to secure the Strait of Hormuz have so far struggled to gain support, with NATO allies reportedly unwilling to commit forces without a broader peace agreement and a formal international mandate. - May 11, 2026
