US President Donald Trump has responded with a swift rejection of Iran's response to a US peace proposal on Sunday that included ending the war on all fronts, including Lebanon, providing compensation for war damages, and emphasising Iranian sovereignty over the Strait of Hormuz.
It also called on the US to end its naval blockade, guarantee no further attacks, lift sanctions, and end a US ban on Iranian oil sales, the semi-official Tasnim news agency said.
Within hours, Trump dismissed Iran's proposal with a post on social media.
"I don’t like it — TOTALLY UNACCEPTABLE," Trump wrote on Truth Social, without giving further detail.
Trump's post sent oil prices surging higher on Monday amid concerns the 10-week-old conflict will drag on, keeping shipping through the Strait of Hormuz paralysed.
The US had proposed an end to fighting before starting talks on more contentious issues, including Iran's nuclear program.
Oil prices jumped $3 a barrel on Monday following news of the continued stalemate that leaves the narrow Strait of Hormuz largely closed. Before the war the waterway carried one-fifth of the world's oil supply and has emerged as one of the central pressure points in the war.
Surveys show the war is unpopular with US voters facing sharply higher gasoline prices less than six months before nationwide elections that will determine whether Trump's Republican party retains control of Congress.
The US has also found little international support, with NATO allies refusing calls to send ships to open the Strait of Hormuz without a full peace deal and an internationally mandated mission.
It's not clear what fresh diplomatic or military steps may be ahead.
Trump is expected to arrive in Beijing on Wednesday. With mounting pressure to draw a line under the war and the global energy crisis it has ignited, Iran is among the topics Trump and Chinese President Xi Jinping are set to discuss.
Addressing whether combat operations against Iran were over, Trump said in remarks aired on Sunday: "They are defeated, but that doesn't mean they're done."
Israeli Prime Minister Benjamin Netanyahu said the war was not over because there was "more work to be done" to remove enriched uranium from Iran, dismantle enrichment sites, and address Iran's proxies and ballistic missile capabilities.
The best way to remove the enriched uranium would be through diplomacy, Netanyahu said in an interview that aired Sunday on CBS News' 60 Minutes. But he did not rule out removing it by force.
Iran's President Masoud Pezeshkian said in a social media post that Iran would "never bow down to the enemy" and would "defend national interests with strength."
Despite diplomatic efforts to break a deadlock, the threat to shipping lanes and the economies of the region remained high.
Recent days have seen the biggest flare-ups in fighting in and around the Strait since a ceasefire began.
Clashes have also continued in southern Lebanon between Israel and Hezbollah, despite a US-brokered ceasefire announced on April 16.
An end to hostilities with Iran would not necessarily bring an end to the war in Lebanon, Netanyahu said in the 60 Minutes interview, in which he also said Israeli planners had underestimated Iran's ability to choke off traffic through the Strait.
"It took a while for them to understand how big that risk is, which they understand now," he said.
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