The Iran-US war entered its 73rd day on May 12, 2026, with the ceasefire described by the US president himself as being on massive life support. The 72 hours that have passed has been the most critical period since the first round of Islamabad talks broke down in April. Iran transmitted its counterproposal to the United States through mediator Pakistan on Sunday. Within hours, the response from Washington was categorical. Trump called it “totally unacceptable,” accused Iran of playing games for 47 years, and added: “They will be laughing no longer.” On Monday, he called it “a stupid proposal” and said Iran’s terms amounted to a demand for surrender in reverse.
Iranian state media reported the response included an urgent call for an end to the war, guarantees against further aggression against Iran, the lifting of sanctions, and recognition of Iran’s sovereignty over the Strait of Hormuz. That last item is the one that makes any deal structurally impossible in its current form. The US cannot formally recognize Iran’s sovereign control over a waterway through which one-fifth of the world’s oil and gas flowed before the war. If Iran gives up that claim, it gives away its biggest bargaining chip. Iran’s foreign minister defended the proposal publicly, saying the only demand was Iran’s legitimate rights. Tehran framed it as reasonable. Washington called it a non-starter. That’s the gap that the war has failed to close in 10 weeks.
The nuclear issue exacerbates the situation. The US has insisted on resolving differences over Iran’s nuclear program before ending the war. Iran has demanded an end to fighting in the Strait of Hormuz before negotiating its nuclear program. The dispute over the sequence isn’t a technical one. It represents two very different perspectives on the issue of the war’s purpose. Washington believes Iran’s nuclear program was the cause of the war and must be resolved first. Tehran considers war as aggression and insists that its end precedes any further discussion.
China’s Variable
The Trump administration on Monday announced a new round of sanctions targeting Iran’s oil operations, including one specifically targeting the sale and shipment of Iranian oil to China. The timing is pointed. The sanctions are a pressure tactic intended to be pushed onto the table before Trump meets with the Chinese President in Beijing this week. Trump is expected to ask Beijing to press Iran to accept US demands for a peace deal. China is Iran’s biggest oil consumer and one of the few countries with enough economic power to influence Tehran’s actions. It’s up to the Trump-Xi summit to determine whether Beijing will exercise that leverage and on what basis and at what cost.
Talks are unlikely to make significant progress until Trump meets with the Chinese president this week. It’s a very realistic judgment. The Islamabad channel remains open. The mediation role of Pakistan is intact. However, the basic contours of any deal have shifted to Beijing, rather than Islamabad. The negotiations will succeed if they result in an agreement that both parties can accept, and that depends on what Iran is willing to accept and what the US will be willing to offer.
Iran’s foreign ministry warned Monday that stability and security in the region have been undermined following Trump’s rejection. The IRGC has warned that any attack on Iranian oil tankers will be met with assaults on US bases and enemy ships across the Middle East. Oil prices surged on Monday as a result of the failure to reach a deal in the weekend negotiations, with prices reflecting the prospect of the Strait of Hormuz remaining shut for longer than expected. The world is still suffering from a ceasefire that was never fully respected and a negotiation that still hasn’t resulted in a single signed contract.
