President Donald Trump tonight told negotiators to "take their time" to clinch a US-Iran deal after an agreement moved within sight.
Hours after Mr Trump held a call with a host of Gulf leaders to discuss "diplomatic solutions", US Secretary of State Marco Rubio said there had been "significant progress" in peace talks.
An initial deal could involve the Strait of Hormuz being reopened, easing the economic impact of the war. The memorandum of understanding could leave the nuclear question to be negotiated later.
After Gulf markets rallied on expectations of a deal, Mr Trump took a more cautious tone on Sunday evening. "The negotiations are proceeding in an orderly and constructive manner, and I have informed my representatives not to rush into a deal," Mr Trump said.
He warned that a US blockade of Iranian ports remained in full force until the deal was complete. Iranian negotiators were contesting "one or two clauses" in the text, pro-regime media said, with a collapse of talks still possible.
Speaking at a press conference with India’s Foreign Minister Dr Subrahmanyam Jaishankar in New Delhi on Sunday, Mr Rubio said: “Iran can never possess a nuclear weapon. The President has been clear about that.”
Mr Rubio also called Iran’s threats to destroy vessels in the Strait of Hormuz illegal and warned condoning those threats would set a dangerous precedent.
“This is an international waterway,” he said. “They don't own it … and what they are doing now is basically they are threatening to destroy commercial vessels using an international waterway … that is illegal under any international concept of international law that governs us.”
“If we allow that to become normal, we would be normalising an unacceptable status quo and setting a dangerous precedent that can be replicated here in this region and multiple places around the world.”
Mr Trump said on Saturday a deal with Iran was “very close” to completion, the final details of which were still being discussed and would be announced soon, subject to approval by Gulf allies and other partners involved in negotiations.
The deal would lead to the opening of the Strait of Hormuz, he wrote on Truth Social late on Saturday.
Mr Trump said he had held a call with leaders of the UAE, Saudi Arabia, Qatar, Pakistan, Turkey, Egypt, Jordan and Bahrain. Gulf leaders have called for peace since the conflict began nearly three months ago.
They discussed “all things related to a memorandum of understanding pertaining to peace”, the US leader wrote.
Israeli Prime Minister Benjamin Netanyahu said he too spoke to Mr Trump about the memorandum to open the Strait of Hormuz, to be followed by "negotiations for a final agreement on Iran's nuclear programme".
He said Mr Trump had agreed with him that "any final agreement with Iran must eliminate the nuclear threat", including removing enriched material from the country - a point which Iranian hardliners may not concede.
Arab sources briefed on efforts to reach a deal said Mr Trump explained to the Arab and other leaders he spoke to the risks to global stability if the Strait of Hormuz remained closed or hostilities resumed.
He also cited the counsel of Gulf Arab nations that hostilities should not resume and that a negotiated settlement was essential as among the key incentives for reaching a deal, they said.
“An agreement has been largely negotiated, subject to finalisation between the United States of America, the Islamic Republic of Iran, and the various other countries, as listed,” the US leader said. “In addition to many other elements of the agreement, the Strait of Hormuz will be opened.”
He said he also had a separate call with Israeli Prime Minister Benjamin Netanyahu, which, he added, “likewise, went very well”.
There was a flurry of diplomacy on Saturday across the Gulf and wider Arab world.
Several calls were held between leaders, such as UAE President Sheikh Mohamed and Qatar’s Emir Sheikh Tamim, as well as Sheikh Tamim and Saudi Crown Prince Mohammed bin Salman.
The apparent breakthrough comes after weeks of diplomacy and threats of renewed military action by both sides in a war Mr Trump launched alongside Israel on February 28.
Despite hitting thousands of Iranian targets and destroying most of its naval assets and air force, the US announced a ceasefire on April 7.
Mr Trump’s main condition for a deal has been that Iran must not obtain a nuclear weapon.
It was not immediately clear what the new deal contains but Mr Trump said the Strait of Hormuz would reopen.
“In addition to many other elements of the agreement, the Strait of Hormuz will be opened,” he said.
After Mr Trump’s announcement, Iranian state media reported on Sunday that the strait would not return to prewar status under any US-Iran agreement.
Tasnim news agency said while some western media reported the channel could be operating normally within 30 days, the proposed understanding referred only to restoring shipping volumes to prewar levels.
Iran would continue to exercise sovereignty over the waterway “in various ways”, with further details to come, the agency reported.
The Arab sources briefed on the deliberations over the proposed deal said Iran wanted the strait to be initially run jointly with Oman and held out the possibility of other countries joining in at a later stage.
Tasnim also said the understanding requires a full lifting of the naval blockade within 30 days, warning that if not removed there would be “no change” in the strait.
The Arab sources who spoke to The National on Sunday said Iran remained adamant not to allow its enriched uranium to leave the country but was open to accepting a freeze on further enrichment.
Mediators, they said, had been trying but to no avail to persuade Iran to show flexibility over the enriched uranium issue, including taking it out of the country and depositing it in safekeeping at either Russia or China, who are among Tehran's closest foreign allies.
