US and Iran Edge Toward Talks but Remain Split on Nuclear Issue and Strait of Hormuz

Indirect negotiations between Washington and Tehran, aimed at bringing an end to a conflict now in its seventh month, carried on this week on the margins of the United Nations General Assembly in New York, with Qatar serving as the intermediary. Yet despite continued engagement from both capitals, the two sides remain at odds over what the talks should actually cover, leaving the diplomatic track stalled even as it stays alive.

Iran's Foreign Minister, Abbas Araghchi, departed New York on Tuesday after telling the state broadcaster IRIB that he expected a formal American reply to Tehran's proposal on reopening the Strait of Hormuz before the day was out. That plan, which Iranian officials say would see the waterway reopened within a week, had been handed to the United States through Qatari mediators the previous week.

The Iranian offer is framed as a sequenced arrangement: in exchange for reopening the strait, Washington would lift its naval blockade, waive sanctions, release roughly $12bn in frozen Iranian assets, and help enforce a broader regional ceasefire that would extend to Lebanon. Only after those steps were taken, under Tehran's design, would wider peace negotiations — including any discussion of Iran's nuclear programme — begin.

President Donald Trump was reported to have turned down that proposal, according to accounts published last week. Yet the picture has been muddied by conflicting signals. Araghchi has said he has still not received an official response from Washington, and American media have reported that Trump might be open to easing sanctions and unfreezing assets — reports the president has forcefully rejected.

A senior US official, speaking on condition of anonymity, told The Associated Press that Trump will not sign off on a final peace agreement until the nuclear question is settled. The same official indicated, however, that the president would consider sanctions relief and the release of some frozen funds if there were tangible movement on the nuclear file. That position was echoed in a Monday report by the US outlet Axios, which said Trump had floated sanctions relief in return for nuclear concessions and quoted officials describing the indirect talks as "positive and constructive," with one suggesting Tehran had signalled flexibility on nuclear matters. Trump responded furiously on Truth Social, calling the story a "hoax," insisting it was "not true," and demanding that Axios pull the article.

For his part, Araghchi pushed back on the suggestion that Washington had formally rejected Iran's overture. In a post on Telegram, he said the Qatari-mediated session held in New York on Monday had focused exclusively on the Strait of Hormuz. He described the Qataris as bringing "ideas" to the table and said they would raise the matter with the American side again before conveying a final US response back to Tehran through the mediator.

Araghchi characterised the negotiations as having grown more "serious," but he was careful to add that Iran's stance had not shifted. "I state firmly that there has been no change in Iran's position," he said late on Monday. "Our conditions for opening the strait are clear. Our position on other issues is also clear. At present, there has been no discussion at all about flexibility."

The Iranian proposal incorporates elements of the Islamabad memorandum of understanding, a document signed by both countries on June 17. That earlier framework appears to serve as a reference point for the current indirect exchanges, though the two sides continue to interpret its scope differently.

At the heart of the impasse is a disagreement over process. Tehran favours a gradual, step-by-step approach, beginning with de-escalation in the Strait of Hormuz and proceeding to broader issues only once that first phase is complete. Washington, by contrast, wants a comprehensive settlement that resolves all outstanding disputes — above all Iran's nuclear programme — in a single package rather than through incremental stages.

The Iranian side has sought to link its Hormuz offer to matters beyond the bilateral relationship, including a wider regional ceasefire that would cover Lebanon, reflecting Tehran's network of allied armed groups across the Middle East. That linkage is one reason American officials are wary of separating the maritime question from the nuclear file.

Underpinning the diplomacy is an economic pressure campaign that has been ratcheted up in recent weeks. In August, Washington announced another expansive round of sanctions targeting Iran and the countries that trade with it, part of an effort to isolate Tehran from the global economy while talks remain deadlocked. Treasury Secretary Scott Bessent described the measures as the "economic asphyxiation" of Iran.

Iran has lived under heavy sanctions for decades, and the restrictions have taken a documented toll on ordinary citizens' quality of life, including access to essential medicines and healthcare. Quantifying the human cost is difficult, but a study published last year in the peer-reviewed medical journal The Lancet Global Health estimated that more than 564,250 people die worldwide each year as a consequence of US sanctions. Tehran characterises the pressure campaign as economic warfare.

With Araghchi now back in Tehran and the Qatari channel still open, the coming days will test whether either side is prepared to move. Iran is awaiting a formal American answer to its Hormuz proposal; Washington is waiting for movement on the nuclear file. Until one of those conditions is met, the talks appear set to continue in the same narrow, mediated groove they have occupied since the UN General Assembly session began — engaged, but not yet advancing.