By Steve Holland, Enas Alashray and Mubasher Bukhari
WASHINGTON/CAIRO/ISLAMABAD, April 21 (Reuters) - The United States expressed confidence that peace talks with Iran would go ahead in Pakistan and a senior Iranian official said Tehran was considering joining, but significant hurdles and uncertainty remained as the end of a ceasefire approached.
U.S. President Donald Trump wants an agreement that would prevent further oil price rises and stock markets shocks but has insisted Iran cannot have the means
to develop a nuclear weapon. Tehran hopes to leverage its control of the Strait of Hormuz to strike a deal that averts a restart of the war, eases sanctions but does not impede its nuclear program.
The Iranian official, speaking to Reuters, said Tehran was "positively reviewing" its participation in talks, despite earlier ruling them out, but stressed no decision had been made.
A Pakistani source involved in the discussions said there was momentum for talks to recommence on Wednesday and Trump could attend in person, or virtually, if a deal were to be signed.
"Things are moving forward and the talks are on track for tomorrow," the source said on Tuesday on the condition of anonymity.
OIL PRICE DOWN ON TALKS OPTIMISM
Oil prices fell and stocks bounced back in early trading in Asia on Tuesday on expectation that U.S.-Iran peace talks will resume this week, after earlier meetings in Islamabad broke down without an agreement. Oil prices had jumped around 6% in Monday trading on doubts over the talks.
Brent crude futures declined 54 cents, or 0.6%, to $94.94 a barrel and U.S. West Texas Intermediate for May fell $1.11, or 1.2%, to $88.50.
But tensions remained high, with Iran's foreign ministry on Tuesday condemning the United States for what it called an attack on the Iranian commercial vessel Touska at the weekend, demanding the immediate release of the vessel, its crew and their families.
"Iran would use all its capabilities to defend its national interests and security and protect the rights and dignity of its citizens... the United States would bear full responsibility for any further escalation in the region," it said, according to Iranian state media.
Maritime security sources said on Monday the vessel was likely to have what Washington deems dual-use items that could be used by the military onboard. The U.S. Central Command said Touska's crew failed to comply with repeated warnings over a six-hour period and the vessel violated the U.S. blockade.
China, the main buyer of Iranian crude, has expressed concern over the "forced interception".
Iranian Foreign Minister Abbas Araqchi had on Monday said truce violations by Washington were a major obstacle to the diplomatic process, while top negotiator Mohammad Baqer Qalibaf accused Trump on X of increasing pressure through a blockade of Iran's ports.
He said Trump was deluded in seeking to "turn the negotiating table into a table of submission", adding Iran rejects negotiations under threat.
'THEY'RE GOING TO NEGOTIATE,' TRUMP SAYS
Thousands of people have been killed by U.S.-Israeli strikes on Iran and in an Israeli invasion of Lebanon conducted in parallel since the war began on February 28. The war triggered a historic shock to global energy supplies and fears that prolonged conflict could push the global economy to the brink of recession.
The U.S. has maintained its blockade of Iranian ports, while Iran lifted and then soon reimposed its own blockade of the Strait of Hormuz, which typically handles roughly one-fifth of the world's oil and liquefied natural gas supply. Mediator Pakistan has lobbied for Washington to end its blockade.
Trump on the John Fredericks Media Network on Monday said Iran would negotiate but reiterated Washington would not allow Tehran to develop a nuclear weapon
"They're going to negotiate, and hopefully they'll make a fair deal, and they'll build their country back up, but they will not have - when they do it - they will not have a nuclear weapon," Trump said.
The United States has not specified when the two-week ceasefire will end. A Pakistani source involved in the talks said it would expire at 8 p.m. Eastern time on Wednesday, or midnight GMT or 3:30 a.m. Thursday in Iran.
PAKISTAN PREPARING FOR TALKS
Pakistan has been preparing to host the talks despite uncertainty about whether they would go ahead. Nearly 20,000 security personnel have been deployed across Islamabad, officials said.
U.S. Vice President JD Vance will travel to Pakistan on Tuesday for Iran talks, Axios reported Monday citing U.S. sources.
A source had earlier told Reuters Vance was in the United States on Monday, denying reports he was already on his way to Pakistan.
Trump warned on Sunday that the U.S. would destroy every bridge and power plant in Iran if it rejected his terms, continuing a recent pattern of such threats.
Iran has said that if the United States were to attack its civilian infrastructure, it would strike power stations and desalination plants in its Gulf Arab neighbours.
White House Press Secretary Karoline Leavitt on Fox News' "Hannity" program said the United States was close to a deal with Iran.
"Thanks to the success of the military operation and his (Trump's) hardline negotiating style, we're on the brink of a deal," Leavitt said.
"And if not, the president, as commander in chief, still has a number of options at his disposal that he's unafraid to use."
(Reporting by Reuters bureaus; Writing by Martin Petty; Editing by Stephen Coates)
