[ANALYSIS] Iranian War Day 73: Iran rejects US proposal as Trump calls response “totally unacceptable”

OVERVIEW

  • Iran submitted its response to the latest US proposal to end the war, with Trump calling it “TOTALLY UNACCEPTABLE”.
  • Iranian state media said the US proposal amounted to Tehran surrendering to Trump’s excessive demands.
  • Iran’s counter-position stressed US compensation for war damages, recognition of Iranian sovereignty over the Strait of Hormuz, sanctions relief and release of blocked assets.

US / IRAN TALKS

  • Trump said he had read Iran’s response and did not like it, calling it “TOTALLY UNACCEPTABLE”.
  • Trump accused Iran of “DELAY, DELAY, DELAY” and attacked the Obama-era Iran deal.
  • Iran submitted its response via Pakistan, according to IRNA and Reuters citing a Pakistani official.
  • Iranian state media said Iran rejected the US plan because it would have meant submission to Trump’s excessive demands.
  • Iran’s proposal called for US war reparations, recognition of Iranian sovereignty over Hormuz, an end to sanctions and release of blocked Iranian assets.
  • Iranian media said Iran’s proposal demanded an immediate end to the war, guarantees against renewed attacks, and an end to the US naval blockade after an initial understanding.
  • Iranian President Pezeshkian said negotiation does not mean surrender or retreat, but defending Iran’s rights and national interests.
  • An Iranian official told Al Jazeera that Iran’s response to the US plan was realistic and positive.
  • WSJ reported on Friday that the US and Iran were working with mediators on a 14-point MoU for a month of talks, potentially as early as next week in Islamabad.
  • Pakistani journalist Mallick posted, "To my understanding, Contrary to publicly put out positions and statements, diplomacy and back channel talks and contacts between Iran and US to work out a draft agreement continues to be in the works -- Diplomacy is not dead."
  • Iran reportedly offered a shorter uranium enrichment suspension than the US’s proposed 20-year moratorium and rejected dismantling nuclear facilities in future talks, according to WSJ.
  • YJC, citing Al Mayadeen, reported Iran said any US deal must end the war and trigger 30-day talks, while Hormuz control and a Lebanon ceasefire remain red lines.
  • Iran also demanded an end to oil sanctions and release of assets.
  • Tehran stated "its main condition for the ceasefire is the cessation of conflicts on all fronts, from Gaza and Lebanon to Yemen", Mehr reported.

SHIPPING

  • US CENTCOM said more than 20 warships are enforcing the blockade and that US forces have redirected 61 commercial vessels and disabled four to ensure compliance.
  • US CENTCOM said US Marines are prepared to intercept non-compliant ships, while Marines are conducting boarding drills amid the Iran blockade, according to Fox News.
  • Iran’s deputy foreign minister warned British and French warships near Hormuz would be met with an immediate decisive response.
  • The UK said HMS Dragon is deploying to the Middle East to pre-position for a potential defensive multinational mission to protect shipping when conditions allow.
  • French President Macron said France never envisaged a direct naval deployment in Hormuz and said any mission would be coordinated with Iran.
  • UK and France will host defence ministers from dozens of countries on Tuesday to discuss the Strait of Hormuz.
  • UK is to deploy a warship to the Middle East as part of European-led planning to escort ships once a stable ceasefire is established.
  • Three tankers carrying 6mln barrels of oil exited the Strait of Hormuz, Sky News reports citing new data

ISRAEL

  • Israeli PM Netanyahu said the war with Iran is not over because nuclear material remains in Iran and still needs to be removed.
  • Netanyahu said Israel would not agree to a Lebanon ceasefire as part of any deal to end the US-Israeli war against Iran.
  • Netanyahu and Trump discussed Iran and Lebanon, according to Yedioth Ahronoth.
  • Israeli reports said Trump told Netanyahu “I want to go in” regarding Iranian nuclear sites.
Context

The rejection of the U.S. proposal by Iran significantly escalates geopolitical tensions and underscores the complexities in reaching a ceasefire. With Trump labeling the response as "totally unacceptable" and Iran demanding substantial concessions, including reparations and sanctions relief, the likelihood of continued conflict in the region increases. This dynamic is set to impact oil prices and regional currencies, particularly the USD, JPY, and EUR, as market participants react to the heightened risk environment.

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