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President Donald Trump has turned down Iran's latest proposal to halt the conflict and restore traffic through the Strait of Hormuz, a decision analysts attribute to his conviction that Washington stands to gain more from continued pressure than from striking an agreement now.
Speaking to reporters on Saturday, Trump dismissed the Iranian offer outright, saying Tehran was seeking a deal only because it is "losing so badly." He acknowledged that both sides wanted an agreement but insisted the current terms were not good enough. "They want to make a deal, and I think that's fine," he said. "I'd like to make a deal too. But that deal would not be acceptable."
The rejection came after Iran put forward a seven-day roadmap that would have required Washington to lift its naval blockade of Iranian ports, waive sanctions on Iranian oil sales, unfreeze an estimated $12bn in Iranian assets, and observe a broader regional ceasefire that would extend to Lebanon and Yemen. Under the plan, Tehran would then reopen the Strait of Hormuz and enter negotiations with Washington on a final settlement.
On Sunday, Iranian Foreign Minister Abbas Araghchi said Tehran had noted Trump's initial reaction but had not yet received a formal response through intermediaries. Qatar has been mediating contacts between the two sides on the margins of the United Nations General Assembly gathering in New York, according to the source material.
The proposal bears a strong resemblance to a memorandum of understanding the two countries signed in June. That arrangement fell apart last month amid disagreements over its terms, triggering a fresh escalation in hostilities, particularly around the Strait of Hormuz, which remains effectively under an Iranian blockade.
Analysts say the standoff reflects a deeper dispute over which side should move first. Andreas Krieg, an associate professor at King's College London, described Trump's reasoning as uncomplicated: the president believes the naval blockade and economic isolation are squeezing Iran hard enough that its offer signals weakness rather than an opportunity Washington should grab. Krieg added that Trump's public claim that Iran is "losing badly" matters because it reveals a belief that time is working in America's favour at the negotiating table.
Central to that calculation is the administration's escalating economic campaign. Washington has tightened its naval blockade, imposed sanctions aimed at Iranian oil revenues, and threatened secondary sanctions against countries that continue trading with Tehran. Last week, the US introduced aviation sanctions that have disrupted Iranian flights, following Treasury Secretary Scott Bessent's announcement of a broader economic pressure campaign promising to target Iranian financial interests worldwide.
Richard Weitz, a senior nonresident associate fellow at the NATO Defence College, said the White House may believe it can "wait a bit and get better terms." He also pointed to unease in Washington over the sequencing Iran has proposed. In Weitz's assessment, the administration may be betting that sustained economic pressure will push the Iranian government toward deeper concessions — a dynamic he argued was visible a decade ago when Tehran agreed to the 2015 nuclear deal in exchange for sanctions relief. He suggested a similar trade-off could emerge in the months ahead.
Yet the strategy carries real political exposure for Trump, with his Republican Party facing November's midterm elections. A Reuters/Ipsos poll from late August indicated that 63 percent of Americans opposed the US-Israel war on Iran, while 31 percent backed it. Rising fuel and transport costs threaten to sharpen broader cost-of-living anxieties before voters head to the polls.
Krieg warned that the passage of time does not pressure Iran alone. "The gamble is that time cuts both ways," he said. With the midterms looming, Trump is reluctant to be seen lifting the blockade, waiving oil sanctions, and releasing Iranian assets merely to reopen a waterway that Iran itself disrupted. At the same time, each additional week brings higher energy prices, continued military risk, and growing strain on Gulf partners.
The near-total closure of the Strait of Hormuz has disrupted oil and gas shipments from Gulf states that rely on energy exports to fund their budgets, amplifying the economic stakes of the standoff for Washington's regional allies.
Mohamad Elmasry, a professor at the Doha Institute for Graduate Studies, characterised Iran's proposal as "kind of throwing a bone to Trump" by offering a possible path out of the crisis. Even so, the gap between the two positions remains wide, with both governments publicly keeping diplomacy alive while refusing to be the first to concede.
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