By Michelle Nichols and Daphne Psaledakis
UNITED NATIONS, Sept 22 (Reuters) - US President Donald Trump on Tuesday called for complete economic isolation of Iran, showing no intention to resume talks at the UN General Assembly but saying he believed a deal would be done after the US midterm elections in November.
Iran had earlier hinted at the prospect of reviving negotiations to end their almost seven-month-old conflict, with the presidents of both countries due at the UN in New York.
A senior Iranian
official said Iran could reopen the Strait of Hormuz to Gulf shipping within seven days if the US fulfilled Tehran's demands to ease military pressure and lift an American blockade on Iranian ports, adding that Tehran had conveyed its latest proposal to Washington via mediators last week.
Secretary of State Marco Rubio told NBC's "Today" show the US was open to speaking with the Iranians, "especially if it has the prospects of leading to something positive and ultimately achieving the goal of what this is all about".
But in a combative speech to the UN, Trump gave no sign of readiness to compromise.
"I call on all nations to help to enforce the complete economic isolation of Iran," he said.
"I believe we'll make a deal right after the election because it doesn't make sense for them not to. They're waiting to see how I do in the midterm election."
IRAN SEES 'GOLDEN OPPORTUNITY' TO REVIVE DIPLOMACY
The senior Iranian official had earlier told Reuters that the US should "announce that it wants to resolve the issue diplomatically, make that official, and then agree on a timeline".
"The UN General Assembly is a golden opportunity for the US to return to diplomacy," the official said.
No face-to-face meetings between Iran and the United States are known to have taken place since July, when an agreement on an interim deal to end the war collapsed weeks after it was signed.
In a reminder of Iran's firm position so far, Parliament Speaker Mohammad Baqer Qalibaf, who headed Iran's negotiating team at previous talks, said Iran would never surrender: "Trump must understand that he cannot impose his power on the Iranian people and its armed forces."
Trump was due to meet on Tuesday with leaders of the six Gulf Arab states: Bahrain, Kuwait, Qatar, Oman, Saudi Arabia and the United Arab Emirates.
All are keen to restore shipping through the Strait of Hormuz, the conduit for a fifth of global oil and gas shipments before the war, but wary of giving their longstanding rival Iran too much power.
All apart from Oman also host huge US military bases that have come under repeated Iranian attack throughout the war.
The biggest of them, Saudi Arabia, has been drawn deeper into the war this month, as Houthi fighters aligned to Iran have advanced in Yemen, routing forces of a Saudi-backed government and threatening Saudi oil exports through the Red Sea.
There was some relief on oil markets on Tuesday, after sources told Reuters that Saudi Arabia had restarted operations at its East-West Pipeline and could resume exports within hours, albeit at reduced volume, from the Red Sea port of Yanbu. [O/R]
The pipeline, Saudi Arabia's main alternative route for exports to bypass wartime disruption in the Strait of Hormuz, had been shut down after attacks this month that Riyadh blamed on Iranian allies in Iraq. [O/R]
SAUDIS SEEK US SUPPORT AGAINST HOUTHIS
The Houthis have driven back Saudi-supported government forces along the Red Sea and the Bab el-Mandeb Strait at its mouth, and have attacked Saudi Arabia directly with missiles and drones. The fighters are now pushing to seize the strategic heights of the Kahboub Mountains that overlook the Red Sea coast.
The US, which bombed the Houthis for two months last year, has so far rebuffed repeated pleas from Saudi Arabia's Crown Prince Mohammed bin Salman to rejoin the fight. The New York Times reported that Trump called off US strikes against the Houthis on Sunday at the last minute, after troops had already begun loading bombs onto planes.
Asked why Washington had held back from striking the Houthis, Rubio said: "Ultimately, if it comes down to it, the United States will always stand with Saudi Arabia and support them because we have an agreement with them to do so.
"That said, that is a very dangerous and complex conflict that pre-exists ... We have a history with the Houthis as well, and that's something we don't want to see impacted either."
On the table at the Gulf states' meeting with Trump is a Qatari proposal for a framework to bring Iran and the Arab Gulf states into a common security architecture, regional sources said. One source said Iran was reviewing the proposal.
Speaking at the Qatar Economic Forum in New York on Sunday, Qatari Prime Minister Sheikh Mohammed bin Abdulrahman Al Thani said any such arrangement would need to provide security guarantees for the Gulf states and expand economic interdependence with Iran.
"Lasting security cannot be built through repeated cycles of escalations and retaliation, or arrangements that leave any state permanently exposed to insecurity," Sheikh Mohammed said.
(Reporting by Reuters Gulf bureaux;Writing by Peter Graff and Kevin Liffey; Editing by Gareth Jones, Alexandra Hudson)
