By Parisa Hafezi, Alexander Cornwell and Kanishka Singh
DUBAI/TEL AVIV/WASHINGTON, March 26 (Reuters) – U.S. President Donald Trump said Iran was desperate to make a deal to end nearly four weeks of fighting, contradicting the Iranian foreign minister who said his country was reviewing a U.S. proposal but had no intention of holding talks to wind down the conflict.
The conflicting statements came as the economic and humanitarian toll of the war mounted, with fuel shortages spreading worldwide, sending companies and countries scrambling to contain the fallout.
Iranian Foreign Minister Abbas Araqchi said while there had been no dialogue or negotiation with the U.S., various messages had been exchanged through intermediaries.
“Messages being conveyed through our friendly countries and us responding by stating our positions or issuing the necessary warnings is not called negotiation or dialogue,” Araqchi said in a state television interview on Wednesday.
Trump, speaking later on Wednesday at an event in Washington, said Iranian leaders “are negotiating, by the way, and they want to make a deal so badly, but they’re afraid to say it because they will be killed by their own people. They’re also afraid they’ll be killed by us.”
Trump has not identified who the U.S. is negotiating with in Iran, with many high-ranking officials among the thousands of people that were killed across the Middle East since the U.S. and Israel attacked Iran on February 28. Iran has since launched strikes against Israel, U.S. bases and Gulf states.
Iran’s supreme commander Ayatollah Ali Khamenei was killed on the first day of the conflict by an Israeli strike and was replaced by his son Mojtaba, who has been wounded in strikes and not been seen in any photograph or video clip since his appointment.
Israel took Iran’s foreign minister Araqchi and parliamentary speaker Mohammad Baqer Qalibaf off its hit-list after Pakistan requested Washington not to target them, a Pakistani source with knowledge of the discussion told Reuters on Thursday.
“The Israelis had their … coordinates and wanted to take them out, we told the U.S. if they are also eliminated then there is no one else to talk to, hence the U.S. asked the Israelis to back off,” the source said.
An Iranian embassy official in Islamabad said talks in Islamabad were still on the table and Pakistan was the preferred destination for Tehran, although nothing had been finalised.
IMPACTS OF CONFLICT SPREAD FAR AND WIDE
The fallout from the conflict, which has caused the worst energy shock in history, has spread far beyond the region.
With the Strait of Hormuz, a conduit for a fifth of the world’s oil and liquefied natural gas, effectively closed, businesses from airlines to supermarkets and used-car dealers are grappling with challenges including rising costs, weakening demand and disrupted supply chains. Some governments are weighing support measures last used during the COVID pandemic.
Farmers and fishers are struggling to source diesel for their tractors and tens of millions more people will face acute hunger if the war continues into June, the World Food Programme estimates.
Sultan Al Jaber, the CEO of Abu Dhabi state oil company ADNOC, described Iran’s restriction of passage through the Strait of Hormuz as “economic terrorism”.
“When Iran holds Hormuz hostage, every nation pays the ransom, at the gas pump, at the grocery store, at the pharmacy,” Al Jaber said in a speech in the U.S. on Wednesday. “No country can be allowed to destabilize the global economy in this way. Not now. Not ever.”
A 15-point U.S. proposal to end the conflict, sent through Pakistan to Iran, calls for reopening the strait, removing Iran’s stocks of highly enriched uranium, curbing its ballistic missile programme and cutting off funding for regional allies, according to three Israeli cabinet sources familiar with the plan.
The White House declined to disclose specifics of its proposal.
A senior Israeli defence official said Israel was skeptical Iran would agree to the terms, and that Israel was concerned U.S. negotiators might make concessions. Israel also wants any agreement to preserve its option to conduct pre-emptive strikes, a second source said.
Additionally, Iran has told intermediaries that Lebanon must be included in any ceasefire agreement with the U.S. and Israel, six regional sources familiar with Iran’s position said.
STOCK RALLY FADES, OIL PRICES RESUME RISE
Hopes of a resolution to the conflict that had boosted global stock markets the previous session faded on Thursday, with oil prices resuming their surge. [MKTS/GLOB]
“Optimism regarding a ceasefire has faded,” said Tsuyoshi Ueno, senior economist at NLI Research Institute.
With stock markets weak, gas prices high and his approval ratings at an all-time low, Trump has strong incentives to find a solution before the conflict escalates further beyond his control, and ahead of November mid-term elections for Congress.
A Reuters/Ipsos poll conducted March 20-23 found 61% of Americans disapproving of U.S. military strikes in Iran, while 35% approved.
Exchanges of missiles and drones across the Gulf continued on Thursday.
The Israeli military said it had completed a wide-scale wave of strikes targeting infrastructure in several areas across Iran, after another wave of attacks on Wednesday. It later said it identified missiles launched from Iran towards Israel.
Admiral Brad Cooper, the Central Command chief leading U.S. forces in the Middle East, said the U.S. had hit over 10,000 targets inside Iran and was on track to limit Iran’s ability to project power outside its borders.
Cooper said in a video briefing on Wednesday that 92% of Iran’s largest naval vessels had been destroyed and that its drone and missile launch rates were down by more than 90%. The U.S. and Israel have damaged or destroyed two-thirds of Iran’s missile, drone and naval production facilities and shipyards, Cooper said.
The Pentagon is meanwhile planning to send thousands of airborne troops to the Gulf to give Trump more options to order a ground assault, sources have told Reuters, adding to two contingents of Marines already on their way. The first Marine unit, aboard a huge amphibious assault ship, could arrive around the end of the month.
U.N. Secretary-General Antonio Guterres on Wednesday warned: The “world is staring down the barrel of a wider war” in the region.
“It is time to stop climbing the escalation ladder – and start climbing the diplomatic ladder,” he said at the U.N. headquarters in New York.
(Reporting by Reuters bureaux; Writing by Lincoln Feast; Editing by Michael Perry)
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