ISLAMABAD/WASHINGTON/TEL AVIV, May 6 (Reuters) - Iran said on Wednesday it was reviewing a U.S. peace proposal that sources said would formally end the war while leaving unresolved the key U.S. demands that Iran suspend its nuclear program and reopen the Strait of Hormuz.

An Iranian foreign ministry spokesperson cited by Iran's ISNA news agency said Tehran would convey its response. U.S. President Donald Trump said he believed Iran wanted an agreement.

"They want to make a deal. We've had very good talks over the last 24 hours, and it's very possible that we'll make a deal," Trump told reporters in the Oval Office on Wednesday.

Earlier in the day, Trump had sounded more pessimistic about the chances of a deal. In a Truth Social post, he threatened to restart the U.S. bombing campaign in Iran, calling the possibility of Tehran agreeing to the latest U.S. proposal a "big assumption."

Trump has repeatedly played up the prospect of an agreement that would end the war that started February 28, so far without success. The two sides remain at odds over a variety of difficult issues, such as Iran's nuclear ambitions and its control of the Strait of Hormuz, which before the war handled one-fifth of the world's oil and gas supply.

A Pakistani source and another source briefed on the mediation said an agreement was close on a one-page memorandum that would formally end the conflict. That would kick off discussions to unblock shipping through the strait, lift U.S. sanctions on Iran and set curbs on Iran's nuclear program, the sources said.

It was unclear how the memorandum differs from a 14-point plan proposed by Iran last week, and Iran has yet to respond to the latest U.S. proposal.

Iranian lawmaker Ebrahim Rezaei, a spokesperson for parliament's powerful foreign policy and national security committee, described the text as "more of an American wish-list than a reality."

Iran's parliament speaker Mohammad Baqer Qalibaf appeared to mock reports that indicated the two sides were close, writing on social media in English that "Operation Trust Me Bro failed." Qalibaf said such reports amounted to U.S. spin following its failure to open the Strait of Hormuz to shipping traffic.

OIL PRICES TUMBLE

Reports of a possible agreement caused global oil prices to tumble to two-week lows, with benchmark Brent crude futures falling around 11% to around $98 a barrel at one point before rising back above the $100 mark.

Global share prices also leapt and bond yields fell on optimism about an end to a war that has disrupted energy supplies. [O/R] [MKTS/GLOB]

Trump on Tuesday paused a two-day-old naval mission to reopen the blockaded strait, citing progress in peace talks.

NBC News, citing two unnamed U.S. officials, said Trump's abrupt reversal came after Saudi Arabia suspended the U.S. military's ability to use a Saudi base for the operation.

Saudi officials were surprised and angered by Trump's announcement that the U.S. would help escort ships through the Strait of Hormuz, leading them to tell Washington they would deny the U.S. permission to fly military aircraft out of a Saudi base or through Saudi airspace, NBC reported.

A call between Trump and Saudi ‌Crown Prince Mohammed bin Salman failed to resolve the issue, NBC said. The White House did not immediately respond to a request for comment on the report.

The U.S. military has kept up its own blockade on Iranian ships in the region. U.S. Central Command said forces fired at an unladen Iranian-flagged tanker on Wednesday, disabling the vessel as it attempted to sail toward an Iranian port in violation of the blockade.

NO MENTION OF KEY U.S. DEMANDS

The source briefed on the mediation said the U.S. negotiations were being led by Trump's envoy Steve Witkoff and son-in-law Jared Kushner. If both sides agreed on the preliminary deal, that would start the clock on 30 days of detailed negotiations to reach a full agreement.

The full agreement would end the competing U.S. and Iranian blockades on the strait, lift U.S. sanctions and release frozen Iranian funds. It would also include some curbs on Iran's nuclear program.

While the sources said the memorandum would not initially require concessions from either side, they did not mention several key demands Washington has made in the past, which Iran has rejected, such as curbs on Iran's missile program and an end to its support for proxy militias in the Middle East.

The sources also made no mention of Iran's existing stockpile of more than 400 kg (900 pounds) of near-weapons-grade uranium.

Israeli Prime Minister Benjamin Netanyahu, Trump's ally against Iran, said on Wednesday the two leaders agreed that all enriched uranium must be removed from Iran to prevent it from developing a nuclear bomb.

Tehran denies wanting to acquire a nuclear weapon.

(Reporting by Reuters bureaus; Writing by Peter Graff, Keith Weir and Simon Lewis; Editing by Andy Sullivan, Alex Richardson, Gareth Jones and Nia Williams)

Copyright Reuters or USA Today Network via Reuters Connect.

This story was originally published May 6, 2026 at 7:46 PM.

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