Efforts to end the Iran conflict were at an impasse on Tuesday with U.S. President Donald Trump unhappy with the latest proposal from Tehran, which he said had informed the U.S. it was in a "state of collapse" and figuring out its leadership situation.
Iran's most recent offer for resolving the two-month war would set aside discussion of its nuclear programme until the conflict was concluded and shipping disputes resolved.
But Trump wants nuclear issues dealt with from the outset, a U.S. official briefed on Trump's Monday meeting with his advisers said.
In a Truth Social post on Tuesday, Trump said: "Iran has just informed us that they are in a 'State of Collapse'. They want us to 'Open the Hormuz Strait,' as soon as possible, as they try to figure out their leadership situation (Which I believe they will be able to do!)."
It was unclear from his post how Iran might have communicated that message and there was no immediate response from Tehran to Trump's latest comments.
Earlier, an Iranian army spokesperson told state media the Islamic Republic did not consider the war over.
Iran has largely blocked all shipping apart from its own from the Gulf through the Strait of Hormuz, a chokepoint for global energy supplies, since the war began on 28 February. This month, the U.S. began blockading Iranian ships.
The Wall Street Journal reported, citing U.S. officials, that the president had instructed aides to prepare for an extended blockade of Iran's ports.
Hopes of reviving peace efforts in a conflict that has killed thousands, thrown energy markets into turmoil and disrupted global trade routes have receded since Trump last weekend scrapped a visit by his special envoy Steve Witkoff and son-in-law Jared Kushner to mediator Pakistan.
Iranian Foreign Minister Abbas Araghchi shuttled in and out of Islamabad twice during the weekend.
Since several senior Iranian political and military figures were killed in U.S.-Israeli strikes, Iran no longer has a single, undisputed clerical arbiter at the pinnacle of power, which may be hardening Tehran's negotiating stance.
The killing of Ayatollah Ali Khamenei on the first day of the war, and the elevation of his wounded son, Mojtaba, to replace him as supreme leader, has handed more power to hardline commanders of the Islamic Revolutionary Guard Corps (IRGC), Iranian officials and analysts say.
Senior Iranian officials, speaking on condition of anonymity, told Reuters the proposal carried by Araghchi to Islamabad over the weekend envisioned talks in stages.
A first step would require ending the war and providing guarantees the U.S. cannot restart it. Then negotiators would resolve the U.S. Navy's blockade of Iran's trade by sea and the fate of the Strait of Hormuz, which Iran aims to reopen under its control.
Only then would talks look at other issues, including the longstanding dispute over Iran's nuclear programme, with Iran seeking U.S. acknowledgment of its right to enrich uranium.
That would bear echoes of Iran's 2015 nuclear deal with the United States and other powers, which had sharply curtailed Tehran's nuclear programme.
Trump unilaterally withdrew from that accord in his first term. Now he faces domestic pressure to end a war for which he has given the U.S. public shifting rationales.
Trump's approval rating fell to the lowest level of his current term, as Americans increasingly soured on his handling of the cost of living and the unpopular war, according to a Reuters/Ipsos poll. The poll showed 34% of Americans approve of Trump's performance, down from 36% in the prior survey.
In the latest sign of strains between Trump and European allies, he said in a social media post that German Chancellor Friedrich Merz "doesn’t know what he’s talking about" regarding Iran.
Merz said on Monday that Iran's leadership was humiliating the U.S. and that he did not see what exit strategy the Trump administration was pursuing.
But Britain's King Charles told the U.S. Congress on Tuesday that despite uncertainty and conflict in Europe and the Middle East, the UK and the U.S., "whatever our differences," will always be staunch allies united in defending democracy. He spoke at a time of deep divisions between the two longtime partners over the war with Iran.
With the warring sides still seemingly far apart, oil prices resumed their upward march, with Brent crude rising nearly 3% to around $111 a barrel.
The World Bank forecast energy prices would surge by 24% in 2026 to their highest level since Russia’s full-scale invasion of Ukraine four years ago, if the most acute disruptions caused by the Iran war end in May.
The United Arab Emirates said it was quitting OPEC and OPEC+, exposing discord among Gulf nations over Iran.
At least six tankers loaded with Iranian oil have been forced back to Iran by the U.S. blockade in recent days, ship-tracking data showed, underscoring the war's impact on traffic.
Iranian government spokesperson Fatemeh Mohajerani told state media that Tehran was using northern, eastern and western trade corridors to neutralise the blockade's effects.
Between 125 and 140 ships usually crossed in and out of the Strait of Hormuz daily before the war, but only seven have done so in the past day, according to Kpler ship-tracking data and satellite analysis from SynMax. None of them were carrying oil bound for the global market.
Also on Tuesday, the U.S. said it was imposing sanctions on 35 entities and individuals for their role in Iran's shadow banking system.
The Treasury Department's Office of Foreign Assets Control also warned any firm making "toll" payments to the Iranian government or the Islamic Revolutionary Guard Corps for passage through the Strait of Hormuz would face sanctions.
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One person was killed and nearly a dozen hurt in a fresh attack on Riyadh's international airport on Sunday, Saudi authorities reported, a day after a strike claimed by Yemen's Houthis killed 13 people and wounded more than 300.
Yemen's Houthis renewed warning to airlines, airport workers, and travellers against using Saudi airports, saying the warning should be taken seriously and that the kingdom “bore responsibility for failed interceptions”, a day after an attack on Riyadh's international airport that killed 12 people.
The Houthi movement has escalated their attacks on Saudi Arabia, targeting the airport in Riyadh and other cities, killing more than a dozen people.
The Kremlin on Monday rejected a 60-day ceasefire idea proposed by Ukrainian President Volodymyr Zelenskyy to allow his country to hold presidential elections, saying it wanted an overall peace deal instead.
Ukraine is ready to stop attacks on Russian oil refineries if Moscow also halts strikes on Ukrainian energy infrastructure, President Volodymyr Zelenskyy said on Sunday.
The leader of Yemen's Saudi-backed government announced the beginning of a major military operation against the Iran-backed Houthis on Sunday, aimed at seizing the territory under their control.
Iran says the Strait of Hormuz will remain closed until the United States meets seven conditions agreed under a June memorandum, as President Donald Trump signals he may soon decide whether to resume military operations against Tehran.
Governments from the Persian Gulf to the Horn of Africa are hedging against a conflict they cannot control, with contingency plans beginning to reshape trade routes, alliances and the regional map.
A supertanker which was cruising through the Strait of Hormuz was targetted by an unknown projectile off the coast of Oman, according to an Iranian news agency which said the vessel was “violating” navigation rules at the Strait of Hormuz on 1 October.
Iranian President Masoud Pezeshkian has accused the U.S. and Israel of seeking to foment internal divisions in Iran after failing to defeat the country militarily, Iran's state news agency IRNA reported.
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