Trump threatens escalation with sides at odds on peace talks

U.S. President Donald Trump threatened Iran with intensified military action after Tehran rejected Washington’s push for a peace deal, with the two sides far apart in efforts to end the near month-long war.

Iran had “better get serious soon, before it is too late, because once that happens, there is NO TURNING BACK, and it won’t be pretty!” Trump posted on social media Thursday. Negotiators “are ‘begging’ us to make a deal,” he said, though there’s little indication so far of any agreement on terms with Tehran.

Iran responded to a U.S. ceasefire proposal this week through intermediaries overnight, the semi-official Tasnim news agency reported, and is now awaiting a reply. Tehran has a string of conditions for ending the conflict, Tasnim said, one of which is a guarantee that the U.S. and Israel won’t resume their attacks.

Oil prices surged on the developments, with optimism fading of a quick resolution. Brent crude climbed more than 4% to more than $106 a barrel, while stocks and bonds fell worldwide.

The U.S. has compiled a list of a dozen demands — alongside three points Iran would get in return — that have been delivered to Tehran by mediators in Pakistan, according to people familiar with the matter.

Iran’s conditions to agree to a ceasefire include the payment of reparations for war damages and recognition of Iran’s authority over the Strait of Hormuz, Tasnim said, citing an informed source. Iran is also calling for an end to the war on all fronts, the news agency reported, a likely reference to Israel’s parallel war against the Tehran-backed Hezbollah militant group in Lebanon.

Trump’s threat of escalation came after the White House ordered more troops to the region, with some set to arrive before week’s end. His comments were at odds with claims that Iran has been “militarily obliterated” during almost four weeks of bombardment, and demonstrate the pressure he’s under to end the conflict and get the critical Strait of Hormuz reopened for oil and gas flows.

Both sides kept up their air attacks on Thursday. The Israel Defense Forces completed a wave of strikes in the central Iranian city of Isfahan, while Iran’s state TV said the country had begun another wave of missile strikes against Israel.

The United Arab Emirates said its air defenses were responding to Iranian missile and drone threats, and two people were killed after debris from an intercepted missile fell in Abu Dhabi. Bahrain said an Iranian attack caused a fire at a facility in Muharraq.

Iran is looking to formalize a transit fee for the Strait of Hormuz, with lawmakers working on a draft bill to impose a toll in exchange for providing security to ships passing via the key waterway, according to the Fars news agency.

Since the war started on Feb. 28, Iran has effectively shuttered the conduit for about a fifth of the world’s oil and liquefied natural gas, triggering a global supply shock. The Islamic Republic is still able to export its own crude from the strait, likely earning hundreds of millions of dollars of extra income.

Trump had set a deadline for Iran to negotiate an agreement to end the war by the end of the week, though the ongoing impasse has raised questions about the likelihood for a deal in that timeframe. Vice President JD Vance may travel to Pakistan for Iran talks this weekend, CNN reported.

The conflict has led to surging fuel and fertilizer prices, and sparked fears of an inflation crisis and worldwide food shortages.

The OECD on Thursday sharply increased its inflation forecasts for major economies and now sees the average rate for the Group of 20 this year jumping to 4% — with an even higher pace in the U.S. — rather than the 2.8% it predicted in December.

Trump has publicly signaled any peace agreement would have to include a prohibition on Iran ever obtaining a nuclear weapon or enriching radioactive material for civilian purposes.

The U.S. plan also stipulates that the Islamic Republic use a reduced missile arsenal in self-defense only, according to people familiar with the matter. Iran would receive certain concessions in return, including sanctions relief.

It’s still unclear who the U.S. is negotiating with since several top Iranian government and military officials have been killed, including Supreme Leader Ali Khamenei on the conflict’s first day. On Monday, Axios identified Mohammad-Bagher Ghalibaf, Iran’s speaker of parliament, as the likely front man for talks, though he denied negotiations have taken place.

There’s little clarity over whether Iran would immediately allow all commercial ships to safely transit the Strait of Hormuz without paying, as well as how Israel would respond to any deal. Israeli officials have said they’ll continue striking Iran for now.

“At this stage we are still at war, and when it might end, no one knows,” Israeli Energy Minister Eli Cohen told radio station Galey Israel. The Israeli military and “defense establishment have the stamina and determination to see this historic campaign, in whose midst we find ourselves, to its conclusion.”

Gulf states such as Saudi Arabia and the UAE are considering joining the war against Tehran, several people with knowledge of the situation said this week. They would only do so if the Islamic Republic attacks vital power and water infrastructure — a high threshold, the people said.

“We can’t let Iran hold the U.S., the United Arab Emirates and the global economy hostage,” UAE Ambassador to the U.S. Yousef Al Otaiba wrote in a Wall Street Journal op-ed. “A simple cease-fire isn’t enough. We need a conclusive outcome that addresses Iran’s full range of threats.”

More than 4,500 people have been killed in the conflict, according to governments and non-government agencies. Around three-quarters of the fatalities have been in Iran, while almost 1,100 people have died in Lebanon, where Israel is fighting a parallel war against Iran-backed Hezbollah militants and has displaced more than a million people. Dozens have been killed in Israel and Arab Gulf states.

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—With assistance from Dana Khraiche, Dan Williams, Eltaf Najafizada and Meghashyam Mali.