Trump sees swift end to war as Iran reviews US peace proposal

US President Donald Trump predicted a swift end to the war with Iran as Tehran considered a US peace proposal that sources said would formally end the conflict while leaving unresolved key US demands that Iran suspend its nuclear programme and reopen the Strait of Hormuz.

An Iranian foreign ministry spokesperson cited by Iran's ISNA news agency said Tehran would convey its response, while Iranian lawmaker Ebrahim Rezaei, a spokesperson for parliament's powerful foreign policy and national security committee, described the proposal as "more of an American wish-list than a reality".

"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 on Wednesday, saying later "it'll be over quickly".

Trump has repeatedly played up the prospect of an agreement to end the war that started on February 28, so far without success. The two sides remain at odds over a variety of difficult issues, such as Iran's nuclear ambitions and its control of the Strait of Hormuz, which before the war handled one-fifth of the world's oil and gas supply.

A Pakistani source and another source briefed on the mediation said an agreement was close on a one-page memorandum that would formally end the conflict. That would kick off discussions to unblock shipping through the strait, lift US sanctions on Iran and set curbs on Iran's nuclear programme, the sources said.

A separate senior Pakistani official involved in the talks told Reuters on Thursday that negotiators were hopeful of reaching a deal but noted gaps between the sides remained. "Our priority is that they announce a permanent end to war and the rest of the issues could be thrashed out once they get back to direct talks," said the official, speaking on condition of anonymity.

Iran's parliament speaker Mohammad Baqer Qalibaf appeared to mock reports that indicated the two sides were close, writing on social media in English that "Operation Trust Me Bro failed".

Qalibaf said such reports amounted to US spin following its failure to open the Strait of Hormuz.

DEAL HOPES DRIVE OIL DOWN, SHARES RISE

Reports of a possible agreement caused global oil prices to tumble to two-week lows on Wednesday, with benchmark Brent crude futures falling about 11 per cent to around $98 a barrel at one point before rising back above the $100 mark.

Global share prices also leapt and bond yields fell on optimism about an end to a war that has disrupted energy supplies. 

“The contents of the US-Iran peace proposals are thin, but there is an expectation in the market that further military action will not take place,” said Takamasa Ikeda, a senior portfolio manager at GCI Asset Management.

Trump on Tuesday paused a two-day-old naval mission to reopen the blockaded strait, citing progress in peace talks.

The US military has kept up its own blockade on Iranian ships in the region. US Central Command said forces fired at an unladen Iranian-flagged tanker on Wednesday, disabling the vessel as it attempted to sail toward an Iranian port in violation of the blockade.

NO MENTION OF KEY US DEMANDS

The source briefed on the mediation said the US negotiations were being led by Trump's envoy Steve Witkoff and son-in-law Jared Kushner. If both sides agreed on the preliminary deal, that would start the clock on 30 days of detailed negotiations to reach a full agreement.

While the sources said the memorandum would not initially require concessions from either side, they did not mention several key demands Washington has made in the past, which Iran has rejected, such as the restrictions on Iran's missile programme and an end to its support for proxy militias in the Middle East.

The sources also made no mention of Iran's existing stockpile of more than 400 kg of near-weapons-grade uranium.