Iran insists on diplomatic solution after Trump rejects peace plan

By Trevor Hunnicutt, Yomna Ehab, Parisa Hafezi and Menna AlaaElDin

WASHINGTON/UNITED NATIONS/CAIRO, Sept 27 (Reuters) - Iran on Sunday insisted that only diplomacy can solve its conflict with the United States and Israel after US President Donald Trump said he rejected an Iranian proposal to reopen the Strait of Hormuz and end fighting.

"Our conditions are clear, and any move toward reopening the Strait of Hormuz is contingent on these conditions being met," Iranian Foreign Minister AbbasAraqchi posted on social media. "Only a negotiated solution can get them out of this deadlock."

Iranannounced a peace proposal earlier this weekat the UN General Assembly in New York, saying it had been transmitted to the Americans via Qatari mediators. Trump on Saturday said he rejected the plan and argued that desperation drives the Iranians’ push for an agreement on the key waterway.

"They want to make a deal to open the Hormuz Strait immediately because they're losing so badly," Trump told reporters at the White House.

Despite Trump's public statements, mediators facilitating US-Iran talks with the United States have not officially relayed a US rejection of the plan, according toAraqchi.

"We are waiting for the mediators to convey the definitive views to us, and we will make a decision based on them," Araqchi posted.

The US has imposed an economic blockade on Iran to put pressure on Tehran to stopIranian attacks on vessels in the Strait ofHormuz, which have drastically reduced shipping through the area even as Trump repeatedly asserts that the US controls the waterway.

The Wall Street Journal first reported that Trump had rejected the Iranian proposal, citing unnamed US officials.

It said Trump was privately skeptical that Iran would meet his demands and had told his staff that he sees a renewed bombing campaign as likely after the November US midterm elections.

A US official had said earlier that discussions with Iran through mediators were "positive and constructive".

CONFLICT HAS DISRUPTED OIL FLOWS, HARMED GLOBAL ECONOMY

The Iranians also engaged their Saudi rivals regarding the Strait of Hormuz, underscoring the stakes of a seven-month-old conflict that has disrupted oil flows through a critical shipping lane and taken a toll on the global economy.

Araqchi told reporters at the United Nations on Friday the proposed deal would trigger a seven-day countdown to reopening the strait and a pause in regional fighting.

"If there is seriousness on the US side to come to a deal and reopen the Strait of Hormuz, everything is now prepared,"Araqchi said. If the US were to agree, the warring parties could start wider talks "on mutually agreed subjects."

That could potentially include discussions of Iran's nuclear program. Trump has said Tehran must never acquire a nuclear bomb, while a senior Iranian official told Reuters that Iran would show no ​flexibility over its nuclear programeven if the US accepted its peace deal.

Iran would grant no concessions over its rights, including ​enriching uranium or shipping its ​highly enriched uranium out ⁠of the country, the official said.

Iranian President Masoud Pezeshkian, in an interview with the CBS show "Face the Nation", said Tehran was ready for talks on its nuclear programand other issues, but would not accept "bullying or coercion".

"Iran is not seeking war, but will defend itself against pressure, threats and attacks,” Pezeshkian said, adding that it had already agreed that "we're not supposed to develop nuclear weapons".

Previous attempts at diplomacy have failed to end the war, which began on February 28 with US and Israeli attacks.

Since then the war has alternated between pauses and renewed strikes, killing thousands while degrading Iran's conventional forces and damaging Iran's already ailing economy.

Iran and its allies have retaliated by extending the conflict throughout the region. Iran has struck US allies in the Gulf with drones and missiles while itsHouthi allies in Yemen have targeted Saudi interests.

(Reporting by Reuters bureaux; Writing by Michelle Conlin; Editing by Sergio Non and Chizu Nomiyama )