WASHINGTON/ISLAMABAD, May 25 (Reuters) - The United States will either have a good agreement with Iran or deal with the country "another way," Secretary of State Marco Rubio said on Monday, as Washington played down hopes for an imminent breakthrough in the three-month-old war.
Rubio told reporters in New Delhi that the U.S. would give diplomacy every chance to succeed before exploring "alternatives", after President Donald Trump said on Sunday he had told his representatives not to rush into any
Iran deal.
There was a "pretty solid thing on the table in terms of their ability to open up the strait, get the strait open, enter into a very real, significant, time-limited negotiation on the nuclear matter, and hopefully we can pull it off," Rubio said.
A day earlier, Trump wrote on Truth Social that the U.S. blockade on Iranian ships in the Strait of Hormuz would "remain in full force and effect until an agreement is reached, certified, and signed".
He added, "Both sides must take their time and get it right."
There was no immediate response from Iran's government. But the Tasnim news agency, linked to Iran's Revolutionary Guards, said the U.S. was still obstructing parts of a potential deal, including Tehran's demand for the release of frozen funds.
Oil prices fell 6% to two-week lows on Monday, as optimism grew that the United States and Iran were moving closer to a peace deal.
Trump raised expectations of an imminent deal on Saturday when he said Washington and Tehran had "largely negotiated" a memorandum of understanding on a peace agreement that would reopen the Strait of Hormuz.
Before the conflict, the critical waterway had carried a fifth of global shipments of oil and liquefied natural gas.
The two sides remain at odds on several difficult issues, such as Iran's nuclear ambitions, Israel's war in Lebanon with the Iranian-backed Hezbollah militia and Tehran's demands for the lifting of sanctions and the release of tens of billions of dollars of Iranian oil revenues frozen in foreign banks.
STICKING POINTS
A senior Trump administration official outlined what he said were the latest contours of issues being negotiated.
Speaking on the condition of anonymity, the official said Iran had agreed "in principle" to open the Strait of Hormuz, in exchange for the United States lifting its naval blockade, and to dispose of Tehran's highly enriched uranium.
The U.S. understood Iran's Supreme Leader Ayatollah Mojtaba Khamenei had endorsed the broad template of the deal, he added.
There was no immediate confirmation from Iran or elaboration on what an "in principle" agreement meant.
The U.S. official said Washington envisioned first re-opening the strait and lifting the U.S. naval blockade. Negotiating the details of the nuclear measures would take more time.
The official pushed back on suggestions that Iran had not accepted disposing of its stockpiled enriched uranium. "It's a question about how," the official said.
A second senior administration official said on Sunday the proposed framework would give negotiators 60 days to reach a final deal.
Iranian sources had told Reuters that in future stages, "feasible formulas" could be found to resolve the dispute over its highly enriched uranium stockpile, including diluting the material under the supervision of the U.N. nuclear watchdog.
Iran has long denied U.S. and Israeli accusations that it is pursuing nuclear weapons and says it has a right to enrich uranium for civilian purposes, although the purity it has achieved far exceeds that needed for power generation.
Trump, whose approval rating have been hit by the war's impact on U.S. energy prices, and who has faced congressional efforts to curb his war powers, has repeatedly played up the prospect of a deal to end the conflict started by the U.S. and Israel on February 28.
A tenuous ceasefire has held since early April.
The president hit back at critics of his handling of the negotiations and his willingness to compromise with Iran.
"If I make a deal with Iran, it will be a good and proper one ... So don’t listen to the losers, who are critical about something they know nothing about," Trump posted on Sunday.
Any deal reinforcing the current fragile ceasefire would bring relief to markets but not immediately defuse a global energy crisis, which has driven up costs of fuel, fertiliser and food.
The U.S.-Israeli bombing of Iran killed thousands of people in Iran before it was suspended in early April.
Israel has also killed thousands more and driven hundreds of thousands from their homes in Lebanon, which it invaded in pursuit of militant group Hezbollah. Iranian strikes on Israel and neighbouring Gulf states have killed dozens.
(Reporting by Reuters bureaux; Additional reporting by Akanksha Khushi, Doina Chiacu, Ariba Shahid, Hatem Mater, Andrew Mills, Elwely Elwelly and Parisa Hafezi; Writing by Helen Coster and Stephen Coates; Editing by Clarence Fernandez)
