Announcements from Iranian officials over the weekend quashed optimism that the U.S. and Iran are near a deal to end President Donald Trump’s war. The Iranian move to emphasize a broad set of demands suggested a need for more sophisticated diplomacy and bolstered fears that a compromise may be out of the Trump administration’s reach.
Optimistic Washington officials had pointed to talks between Iran and Oman, an Arab state aligned with the U.S. The two nations border the lynchpin of the Strait of Hormuz, the waterway along Iran’s southern border, where Iranian forces have disrupted traffic since Trump’s assault began, treating Hormuz as a strategic asset.
Treasury Secretary Scott Bessent and Vice President JD Vance have said the administration is now focused on increasing the flow of oil and gas through the strait to combat global price increases, not on the the broad goals Trump specified in initiating the conflict. The talks between Oman and Iran aim to cement a new understanding for ships to safely traverse the strait.
Those talks continue, Iranian Foreign Minister Abbas Araghchi said Sunday. But their prospects are now more explicitly tied to a sweeping U.S.-Iran bargain.
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The Iranian comments on Saturday, first coming from the country’s Supreme National Security Council and then emphasized by Araghchi, suggested Tehran will not agree to a limited deal about the strait without proof the U.S. is addressing broader Iranian demands. The declarations reiterated terms in a U.S.-Iran memorandum of understanding Trump signed in June, including reparations for the war this year and for U.S.-Israeli strikes on Iran in 2025, the withdrawal of the American blockade on Iranian ports and American troops around Iran, stopping attacks on Iran’s allies in the Middle East (notably Lebanon) and broad economic relief for Iranians from U.S. sanctions and asset freezes.
Officials familiar with the diplomacy and other experts told NOTUS that Iran’s latest comments suggest negotiations need a reset, with a U.S.-Iran settlement still feasible — and desirable for both parties — but harder to reach. The complications extend to the third parties serving as mediators: Oman, but also Saudi Arabia and other wealthy Gulf countries with deep ties to the Trump White House that view ending the war as an urgent security priority.
“Iran has long linked reopening Hormuz to reciprocal U.S. steps,” said Ali Vaez of the International Crisis Group think tank. He argued for the Trump administration to make a new step-by-step offer to partly meet Iran’s demands, rather than renewed American military pressure through further strikes, “which may satisfy Trump’s instincts but would only harden Tehran’s position.”
Opening with the U.S. assassination of Iran’s longtime supreme leader, Ali Khamenei, the war has fractured Iranian leadership. Hard-liners, for instance in the country’s Islamic Revolutionary Guard Corps, have expanded their influence in the policy-making establishment relative to figures more open to negotiations, and cited the war to emphasize wariness toward the U.S., a foe for many decades. Forces leery of engagement have ramped up criticism of Iranian President Masoud Pezeshkian, and an IRGC commander gained a powerful post on the national security council on Sunday.
Sanam Vakil, an analyst at the Chatham House think tank, wrote on X that Iranian hardliners worry that too soft a deal with Trump would give him “an off ramp” to rebuild military power ahead of another campaign against Iran.
“Since Trump has proven himself, again and again, to be an unreliable negotiator, Tehran will not give away its most potent leverage unless and until the U.S. delivers on its own obligations,” Vaez told NOTUS, saying Iranian officials are being maximalist rhetorically but could eventually settle.
Iran knows the U.S. will never pay reparations, he added, “but Tehran demands it in order to secure as much sanctions relief as possible.”
Iran’s expectations suggest the country is unlikely to reach for what the U.S. presents as a quick and easy deal. That leaves Trump and others — like regional governments — to suggest a mutually agreeable path.
Trump told Axios on Sunday he is “low-keying it” and suggested Iran is feeling greater economic pain from the war than Americans. The president has told aides he is ready to declare victory and abandon previously stated goals of the war, like a new limit on Iranian nuclear capacity, The Wall Street Journal reported. Both outlets suggested he is unlikely to restart military strikes in response to Iran’s new demands.
Saudi Arabia has discouraged saber-rattling by Trump, with a Middle Eastern official telling NOTUS that urging from the country has “been extremely helpful” in supplementing the Oman-Iran talks. The official, who spoke on the condition of anonymity because of the delicate nature of the negotiations, said the Saudis were “freaking out” about being targeted by Iranian allies in Iraq and Yemen.
That official noted, however, that Israel remains a wild card. Israeli Prime Minister Benjamin Netanyahu helped initiate the war and continues to direct Israeli attacks in Lebanon, which could anger Iran. The offensive there “is a huge card [Israel] can play with,” said the official, who also argued pro-Israel donors in the U.S. could nudge Trump and Republicans away from diplomacy. GOP lawmakers have already suggested they could stymie U.S steps to cool tensions with Iran.
People familiar with the U.S. administration’s thinking have also told NOTUS that Trump is extremely unwilling to appear to be capitulating to Iran and is continuously enthusiastic about revisiting military options.
Saudi and other regional officials are frustrated with the sense Iran is delaying peace, but they are also struggling to secure a commitment for a de-escalation from Washington.
They see Vance, who has expressed doubts about the war and Israel’s influence in U.S. politics, as an ally, yet acknowledge Trump’s volatility remains the key factor in negotiations.
Randa Slim, of the Stimson Center think tank, said Middle Eastern leaders don’t view Vance as having the final word in negotiations, but they “trust him more than [Secretary of State] Marco Rubio to listen to and convey their concerns.”
Rubio is a longtime Iran hawk and is seen as close to Netanyahu.
“Even as they see Iran is overplaying its hand,” Gulf Arab states generally agree “the war must end,” said Yasmine Farouk, also with Crisis Group. “Pending issues, like the permanent status of Hormuz, should be addressed by all other means, but not through a return to a full-scale war that threatens their infrastructure.”
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