Iran has reiterated that diplomacy remains the only route to ending its conflict with the United States and Israel, after US President Donald Trump rejected a proposal from Tehran aimed at reopening the Strait of Hormuz and creating a pathway towards wider negotiations.
The latest disagreement has added further uncertainty to a conflict that has already disrupted shipping, affected energy supplies and drawn several countries across the Middle East deeper into the fighting.
Iranian Foreign Minister Abbas Araqchi said Tehran’s position remained clear: reopening the strategically important Strait of Hormuz would depend on specific conditions being met and would have to form part of a negotiated settlement.
At the same time, Trump has said he expects US and Iranian representatives to continue talking this week, leaving the possibility of further diplomacy open despite his rejection of the proposal.
The developments were reported by Reuters on September 27, 2026.
Iran Says Negotiations Are the Way Out
Iranian Foreign Minister Abbas Araqchi said Tehran was still waiting for an official response from Washington through mediators involved in the discussions.
According to Reuters, Araqchi said Iranian conditions for reopening the Strait of Hormuz remained in place and argued that only a negotiated agreement could break the current deadlock.
Iran had presented its proposal during the United Nations General Assembly in New York. Tehran said the proposal had been passed to the United States through Qatari mediators.
However, Trump publicly rejected the proposal on Saturday.
Despite that rejection, Trump later indicated that negotiations could continue. In an interview with Axios on Sunday, he said he expected US negotiators to hold further discussions with Iran during the week.
This leaves the situation in an uncertain position: the proposed agreement has been rejected publicly, but diplomatic contacts have not necessarily ended.
What Is Iran’s Strait of Hormuz Proposal?
The Strait of Hormuz is one of the world’s most important maritime routes for energy shipments. Any prolonged disruption can affect oil supplies, transport costs and economies well beyond the Middle East.
Iran had previously indicated that it could reopen the waterway within a week if the United States reduced military pressure and lifted its blockade on Iranian ports.
Araqchi had described a seven-day process under which:
- Conditions would first be agreed between the parties.
- A pause in regional fighting could follow.
- The Strait of Hormuz could then be reopened.
- Wider negotiations could begin afterwards.
- Future discussions could potentially include Iran’s nuclear programme and other disputed issues.
The proposal therefore linked the future of the waterway to broader political and economic arrangements rather than treating the reopening of the strait as a separate issue.
Why Trump Rejected the Proposal
The Trump administration has questioned whether Iran would fulfil its commitments after receiving economic relief.
US Ambassador to the United Nations Mike Waltz said Washington viewed Iran’s proposal as requiring significant concessions before broader negotiations could take place.
According to Reuters, Waltz said the proposal involved demands including the lifting of sanctions and the release of frozen Iranian assets. He also said Trump was not convinced that Tehran was prepared to negotiate in good faith over the future of its nuclear programme.
Trump has separately argued that Iran was seeking an agreement to reopen Hormuz because of the pressure created by the conflict.
The two sides therefore appear to disagree not only over what an agreement should contain, but also over which steps should happen first.
The central disagreement
The dispute can broadly be understood as a question of sequencing:
Iran’s position:
Economic and military pressure should be reduced and conditions met before the Strait of Hormuz is reopened and wider negotiations proceed.
Washington’s position:
The United States wants stronger assurances about Iran’s behaviour and its nuclear programme rather than providing major economic concessions in advance.
This difference has become one of the main obstacles to a wider diplomatic settlement.
Iran Says It Is Ready to Discuss Its Nuclear Programme
Iranian President Masoud Pezeshkian has also said Tehran is prepared to discuss its nuclear programme and other issues.
However, he has rejected what he described as pressure or coercion.
Iran has repeatedly maintained that it does not seek nuclear weapons, while the Trump administration has made preventing Iran from acquiring a nuclear bomb one of its key objectives.
That disagreement is likely to remain central to any future negotiations.
Iran’s willingness to discuss nuclear issues could provide a possible route towards renewed talks, but the terms under which such discussions would take place remain unresolved.
Conflict Has Put the Strait of Hormuz at the Centre of the Crisis
The Strait of Hormuz has become one of the most important pressure points in the conflict.
The narrow waterway connects the Persian Gulf with the Gulf of Oman and the wider Arabian Sea. Large volumes of oil and other energy products normally pass through the region.
The disruption of shipping has therefore had consequences for:
- Global oil markets
- Energy-importing countries
- Shipping companies
- Insurance costs
- Regional economies
- Inflation and consumer prices
- International supply chains
Reuters reported earlier that oil prices and financial markets had reacted to developments surrounding the possibility of reopening Hormuz and restarting US-Iran diplomacy.
The importance of the waterway also explains why countries outside the immediate conflict zone are closely watching negotiations between Washington and Tehran.
Saudi Arabia Is Being Drawn Further Into the Conflict
The conflict has also increasingly affected Saudi Arabia.
Iran and its regional allies have expanded the geographical reach of the fighting, while Houthi forces in Yemen have intensified pressure on Saudi-backed forces.
Reuters reported that Houthi forces had advanced in parts of Yemen, increasing pressure on the Saudi-backed government and creating additional concerns about Saudi oil exports and regional security.
Saudi Arabia is particularly exposed because of its position within the Gulf and its importance to global energy markets.
The country’s security concerns have grown as attacks and military activity have spread across the region.
Seven Reported Dead in Yemen Market Strike
The humanitarian situation is also worsening.
Yemen’s Houthi-run health ministry said that seven people were killed and 40 injured, including children, after a strike hit shops at a market near the Mawiya junction in Taiz province.
Later, Yemen’s internationally recognised government said its forces had targeted a Houthi military camp and vehicles at the same location.
The conflicting accounts underline the difficulty of independently verifying battlefield claims during the ongoing conflict. Reuters reported both sides’ accounts.
Saudi Schools Move Towards Remote Learning
The security situation has also begun affecting daily life in Saudi Arabia.
According to people who received messages from schools in Riyadh, parents were notified that classes would move online for the week. The notices reportedly did not provide a reason.
Saudi authorities did not immediately respond to Reuters’ request for comment.
The development illustrates how the effects of the conflict can extend beyond military targets and directly affect families, education and ordinary routines.
A Conflict That Has Already Lasted Months
The war began on February 28 with US and Israeli strikes on Iran, according to the Reuters report.
Since then, the conflict has included periods of fighting and pauses, with attacks affecting several countries and thousands of people reportedly killed.
Iran’s military capabilities have suffered damage, while its already struggling economy has faced additional pressure.
At the same time, Iranian allies and regional partners have helped spread the conflict beyond Iran’s borders.
The resulting situation has created several interconnected security problems involving:
- Iran
- The United States
- Israel
- Saudi Arabia
- Yemen
- Gulf states
- Shipping routes
- Global energy markets
This makes a diplomatic settlement considerably more complicated than a direct agreement between Washington and Tehran alone.
Global Energy Markets Remain Vulnerable
The Strait of Hormuz is particularly important because disruption there can quickly influence the global energy market.
Even the possibility of the waterway reopening has previously affected oil prices. Reuters reported that crude prices fell amid expectations that Iran might reopen Hormuz and that diplomatic discussions could resume.
Conversely, continued disruption could put renewed upward pressure on energy costs.
For countries that rely heavily on imported oil, sustained instability could contribute to higher transport and production costs.
Why Hormuz matters to the global economy
A prolonged disruption could affect:
- Oil prices – Reduced supply through a major shipping route can increase market pressure.
- Transport costs – Ships may need to take longer alternative routes.
- Insurance premiums – Greater risks can increase the cost of commercial shipping.
- Inflation – Higher energy and transport costs can feed into consumer prices.
- Industrial production – Energy-intensive industries can face higher operating expenses.
- Food prices – Higher transport and energy costs can eventually affect food supply chains.
International Efforts to Protect Shipping
The international community has also been discussing ways to protect commercial shipping.
France has been working on a possible United Nations Security Council resolution aimed at safeguarding freedom of navigation through the Strait of Hormuz. Reuters reported that the proposal would focus on maritime security while attempting to avoid expanding the dispute into a wider confrontation.
Other countries have also expressed concern about the security of Hormuz and the Bab el-Mandeb Strait.
Russian President Vladimir Putin and Saudi Crown Prince Mohammed bin Salman, for example, recently discussed the importance of safe and uninterrupted passage through both strategic waterways.
What Happens Next?
The immediate focus is likely to be on whether US and Iranian representatives return to substantive negotiations.
Several issues remain unresolved.
Key questions include:
- Will Washington and Tehran resume formal talks?
- Will Iran modify its conditions for reopening Hormuz?
- Will the United States offer any sanctions relief?
- Can the two sides agree on the sequence of steps?
- Will discussions include Iran’s nuclear programme?
- Can fighting in Yemen and other parts of the region be brought under control?
- Can commercial shipping through Hormuz return to normal?
- Will regional countries become more directly involved?
Trump’s statement that further talks are expected means diplomacy remains possible despite the rejection of the current proposal.
Diplomacy Remains on the Table
The latest developments show that the diplomatic channel between Iran and the United States has not completely disappeared.
Iran is insisting that reopening the Strait of Hormuz must be connected to a negotiated settlement and the fulfilment of its conditions. Washington, meanwhile, has rejected the current proposal and questioned whether Tehran is prepared to make the commitments the United States is seeking.
The next round of discussions could therefore be crucial.
For the wider Middle East, the stakes extend far beyond the political relationship between Washington and Tehran. Continued fighting could deepen the crisis in Yemen, increase risks for Saudi Arabia and other Gulf states, and keep pressure on one of the world’s most important energy shipping routes.
For the global economy, the biggest concern remains the same: how long the disruption around the Strait of Hormuz will continue, and whether diplomacy can produce a workable agreement.
At present, both sides continue to leave the possibility of negotiations open, but major disagreements over sanctions, security, Iran’s nuclear programme and the reopening of Hormuz remain unresolved.
Key Takeaways
- Iran says diplomacy is the only way to resolve its conflict with the US and Israel.
- Trump has rejected Iran’s current proposal for reopening the Strait of Hormuz.
- Further US-Iran talks could still take place this week, according to Trump.
- Iran says reopening Hormuz depends on specific conditions being fulfilled.
- Washington has raised concerns about sanctions relief, frozen Iranian assets and Iran’s nuclear programme.
- The conflict is increasingly affecting Saudi Arabia and Yemen.
- Houthi authorities reported seven deaths and 40 injuries following a strike near a market in Taiz.
- Disruption around Hormuz continues to create risks for global oil supplies, shipping and the wider economy.
- International governments are exploring diplomatic and maritime-security measures to protect commercial shipping.
Sources and References
- Reuters — Iran insists on diplomatic solution after Trump rejects peace plan, September 27, 2026.
- Reuters — Iran ready to reopen Strait of Hormuz if US eases military pressure and lifts blockade, September 22, 2026.
- Reuters — Trump urges complete isolation of Iran, expects deal after election, September 22, 2026.
- Reuters — France considers UN Security Council resolution on Hormuz, September 22, 2026.
- Reuters — Putin and Saudi crown prince discuss safe passage through Hormuz and Bab el-Mandeb, September 22, 2026.
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