Iran Demands US Troop Exit and Reparations in Peace Deal

The terms were confirmed by Deputy Foreign Minister Kazem Gharibabadi, marking Tehran's first official public comments on the new offer. According to reports from Iran's state media, the substance of the proposal looks largely similar to an earlier version that U.S. President Donald Trump dismissed last week, bluntly describing it as "garbage."

Trump Pauses Strikes, Signals Cautious Optimism
Despite his earlier dismissal, Trump announced on Monday that he had held off on a planned resumption of military strikes after Iran submitted the new proposal. He told reporters there was now a "very good chance" of reaching an agreement that would limit Iran's nuclear programme — and made clear that a diplomatic resolution would be his preferred outcome.

"If we can do that without bombing the hell out of them, I would be very happy," Trump said.

The leaders of Qatar, Saudi Arabia, and the United Arab Emirates had reportedly urged Trump to pause the attacks, believing a deal was within reach. Pakistan, which hosted the only formal round of peace talks last month and has been quietly carrying messages between the two sides, confirmed it had passed the Iranian proposal along to Washington.
Still, a Pakistani source involved in the process struck a cautious note. The sides "keep changing their goalposts," the source said, adding that time was running short.

Pressure to reach a resolution has been building for weeks, largely because the conflict has disrupted shipping through the Strait of Hormuz — a critical passage for global oil supplies and other commodities. The stakes extend well beyond the two countries directly involved.

Mixed Signals and Unconfirmed Concessions
Behind the scenes, there are signs that the two sides may be inching closer — though neither has publicly acknowledged making any concessions. A senior Iranian official suggested that Washington had shown some flexibility, including a reported agreement to release a quarter of Iran's frozen funds held in foreign banks, which amount to tens of billions of dollars in total. Iran, however, wants all of those assets freed, not just a portion.

There were also indications that the U.S. had softened its stance on Iran's nuclear activities, reportedly showing more willingness to allow limited peaceful nuclear operations under International Atomic Energy Agency supervision. Washington has not confirmed any of these reported concessions.

American officials flatly denied a separate claim that the U.S. had agreed to waive oil sanctions on Iran during the negotiation period.

The broader toll of the conflict has been severe. The U.S.-Israeli bombing campaign killed thousands of people inside Iran before a ceasefire halted the fighting in early April. Israel's military operations in Lebanon, aimed at dismantling the Iran-backed Hezbollah militia, killed thousands more and displaced hundreds of thousands of people. Iranian strikes on Israel and neighboring Gulf states have also resulted in dozens of deaths.

The ceasefire has largely held, though drone attacks originating from Iraq and attributed to Iran and its allies have continued to target countries including Saudi Arabia and Kuwait.

Trump and Israeli Prime Minister Benjamin Netanyahu had framed the war as necessary to curb Iranian support for regional militias, dismantle its nuclear programme, destroy its missile and drone capabilities, and weaken the grip of its ruling clerical establishment. By most accounts, those goals remain largely unmet. Iran still holds a stockpile of near-weapons-grade enriched uranium and has maintained its capacity to threaten neighbors through missiles, drones, and proxy forces. Despite facing both a massive military assault and internal unrest at the start of the year, Iran's leadership has shown no sign of collapse or serious organized opposition.