By Jacob Bogage and Parisa Hafezi
WASHINGTON/DUBAI, May 22 (Reuters) - Iran's foreign minister met his Pakistani counterpart on Friday to discuss proposals to end the U.S.-Israeli war, Iranian media reported, with Tehran and Washington still at odds over Tehran's uranium stockpile and controls on the Strait of Hormuz.
Two days after presenting the Iranians with the latest U.S. message in the negotiations, Pakistani Interior Minister Syed Mohsin Naqvi held another round of talks with Iranian Foreign
Minister Abbas Araqchi in Tehran, the semi-official Tasnim news agency reported.
U.S. Secretary of State Marco Rubio told reporters on Thursday there had been "some good signs" in the talks, but there could be no solution if Tehran enforced a tolling system in the Strait of Hormuz, which it effectively closed to most shipping after the war began on February 28.
"There's some good signs," Rubio said. "I don't want to be overly optimistic ... So, let's see what happens over the next few days."
A senior Iranian source told Reuters on Thursday that gaps had been narrowed, although uranium enrichment and the Strait of Hormuz remained among the sticking points.
The war has wreaked havoc on the global economy, with the surge in oil prices stoking fears of rampant inflation. About a fifth of the world's oil and liquefied natural gas shipments travelled through the Strait of Hormuz before the war.
The U.S. dollar was near its highest level in six weeks on Friday amid the uncertainty over the peace talks, while oil prices climbed as investors doubted the prospects of a breakthrough.
"We're coming to the end of week 12, we're six weeks in the ceasefire, and I'm just not really that convinced we're any closer to a resolution between the U.S. and Iran," Tony Sycamore, a market analyst at IG, said of the Middle East war.
'WE WILL GET IT'
U.S. President Donald Trump said the U.S. would eventually recover Iran's stockpile of highly enriched uranium - which Washington believes is destined for a nuclear weapon though Tehran says it is intended purely for peaceful purposes.
"We will get it. We don't need it, we don't want it. We'll probably destroy it after we get it, but we're not going to let them have it," Trump told reporters at the White House on Thursday.
Two senior Iranian sources told Reuters before Trump's comments that Iranian Supreme Leader Ayatollah Mojtaba Khamenei had issued a directive that the uranium should not be sent abroad.
The U.S. president also railed against Tehran's intentions to charge fees on ships using the strait.
"We want it open, we want it free. We don't want tolls," Trump said. "It's an international waterway."
Trump faces domestic pressure ahead of November midterm elections, with Americans angry over the surge in fuel prices and his approval rating near its lowest level since he returned to the White House last year.
Tehran submitted its latest offer to the U.S. earlier this week.
Tehran's descriptions suggest it largely repeats terms Trump previously rejected, including demands for control of the Strait of Hormuz, compensation for war damage, lifting of sanctions, release of frozen assets and the withdrawal of U.S. troops.
GLOBAL ENERGY SHOCK
The International Energy Agency says the conflict has produced the world's worst energy shock.
It warned on Thursday that the peak of summer fuel demand coupled with a lack of new supply from the Middle East meant the market could enter the "red zone" in July and August.
Traffic through the strait has fallen to a trickle compared with 125 to 140 daily passages before the war.
Iran has said it aims to reopen the strait to friendly countries that abide by its terms that could potentially include fees.
"It would make a diplomatic deal unfeasible if they were to continue to pursue that. So it's a threat to the world if they were trying to do that, and it's completely illegal," Rubio said.
Trump and Israeli Prime Minister Benjamin Netanyahu said their war aims were to curb Iran's support for regional militias, dismantle its nuclear program, destroy its missile capabilities and make it easier for Iranians to topple their rulers.
But Iran has so far retained its stockpile of near-weapons-grade enriched uranium, and its ability to threaten neighbours with missiles, drones and proxy militias.
(Reporting by Reuters bureaus; Writing by Kate Mayberry; Editing by Stephen Coates)
