US waits on Iran's peace deal response as Israel strikes Lebanon

The U.S. is waiting on Iran to respond to its proposal to reopen the Strait of Hormuz and end a war that’s killed thousands of people, with tensions still high in both the Persian Gulf and in Lebanon.

Iran’s leaders are yet to indicate whether they’ll accept the terms of the deal, though they’ve previously shown little sign of yielding on their nuclear program and accepting a moratorium on enriching uranium, which the U.S. is calling for.

Iran’s President Masoud Pezeshkian recently met with Supreme Leader Ayatollah Mojtaba Khamenei for nearly two and a half hours, the state-owned Mizan news agency reported Thursday, without saying what the talks were about or when they were held.

Iran is expected to send a response via Pakistan, acting as a mediator, in the next two days, a person familiar with the matter said on Wednesday, asking not to be identified discussing sensitive information. Oil has declined sharply since news of the U.S. offer emerged on Wednesday, signalling some traders are optimistic a deal could be reached.

Israel said it killed a Hezbollah commander in a southern suburb of Beirut, its first strike on the city since a ceasefire began in Lebanon last month. That demonstrated the fragility of that truce, with paused a parallel war that was hampering peace efforts with Tehran.

Washington has relayed a one-page memo to the Islamic Republic that could reopen the strategic Strait of Hormuz and lift the U.S. blockade of Iranian ports, according to the person familiar with the matter. That would set the stage for a month of talks aimed at securing a final agreement to bring the 10-week conflict to a close.

Should the negotiation get to that stage, the sides will discuss Iran’s nuclear activities. U.S. President Donald Trump has repeatedly said the objective of the war is to prevent Tehran having a nuclear weapon, something Iran has always denied. Trump said Wednesday the U.S. is “going to get” the Islamic Republic’s stockpile of highly enriched uranium as part of the agreement, though there’s been no indication Tehran is willing to make that concession.

The U.S. will start a broader and more intense bombing campaign if Iran rejects the initial 14-point peace plan, Trump said earlier in a social media post, though he’s repeatedly walked back on threats to escalate the conflict. He told PBS News Hour he believes there’s “a very good chance” of a deal, possibly before his scheduled summit with Chinese President Xi Jinping in Beijing next week.

Iran’s state-affiliated news agency ISNA said reports on elements of the proposal amount to “media speculation and atmosphere-building,” adding that nuclear enrichment is not part of the current discussions.

Khamenei succeeded his father, Ali, who was killed by an Israeli strike on the first day of the war. He hasn’t been seen in public since. Last week, in a statement, he said Iran would not give concessions on its nuclear program, describing it as a “national asset” that Iranians would protect at all cost.

Other outstanding issues include limits on Iran’s ballistic missile program and its support for allied militant groups such as Lebanon’s Hezbollah.

Those are a priority for Israel, whose officials struck a cautious tone on the latest U.S. push to wind down the campaign against Iran. Ambassador to the United Nations Danny Danon told Army Radio on Thursday that “we need to wait and not come out with declarations and headlines” about a potential deal.

Prime Minister Benjamin Netanyahu said Israel is in close coordination with the U.S. on peace efforts with “no surprises.”

Oil declined 3.2% on Thursday to below $100 a barrel after a week of sharp swings. Clashes in the Strait of Hormuz triggered a surge in Brent crude to nearly $115 a barrel on Monday, before sliding below $97 on Wednesday as Iran said it was evaluating the proposal.

Reopening Hormuz, where a fifth of the world’s oil and liquefied natural gas flowed before the war brought traffic to a standstill, is a key objective for Trump.

He’s scheduled to meet with Xi on May 14-15, after an earlier meeting was postponed in the early days of the conflict. China on Wednesday added its voice to global pressure to wrap up the conflict and reopen the waterway, telling Iran that a continuation of hostilities is “inadvisable.”

Polls show Americans’ distaste for the conflict is growing — six months from midterm elections where energy costs will be a central focus. Gasoline prices breached $4.50 a gallon for the first time since July 2022, according to the American Automobile Association.

Here’s more related to the war:

•The new peace plan includes provisions for the removal of sanctions on Iran and a moratorium on the country’s uranium enrichment program, according to the person familiar with the matter. All conditions could be reversed if a wider nuclear deal can’t be reached, they said. Axios first reported on the proposal.

•At a meeting in Beijing, China’s Foreign Minister Wang Yi urged Iranian counterpart Abbas Araghchi to keep negotiating, saying “a resumption of hostilities is inadvisable.” Araghchi said Iran appreciated a four-point proposal China offered on resolving the war.

•Trump and Xi are to meet in Beijing on May 14-15, with the U.S. leader acknowledging Tuesday that the conflict would be on the agenda. Trump told PBS News that the U.S. would offer sanctions relief to Iran if the deal is secured, which could render unnecessary any potential U.S. penalties on Chinese companies buying Iranian oil.

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—With assistance from Rakteem Katakey.