US Vice President JD Vance left Pakistan after the talks — the highest-level meeting between the two sides since the 1979 Islamic revolution – and warned that Washington had made Tehran its “final and best offer” for a deal.
“We leave here with a very simple proposal,” he said. “We’ll see if the Iranians accept it.”
Iran’s parliamentary speaker Mohammad Bagher Ghalibaf said his negotiating team “put forward constructive initiatives but ultimately the other side was unable to gain the trust of the Iranian delegation in this round of negotiations.”
The failure of the talks will raise concerns that a return to fighting could drive world energy prices higher and further damage shipping and oil and gas facilities in the Gulf.
But Saudi Arabia’s energy ministry said Sunday its key east-west oil pipeline was back in service after it was damaged in earlier strikes, and Qatar’s transport ministry said it was lifting some restrictions on Gulf shipping.
Pakistan, which hosted the talks and whose leadership had ushered the rival sides to the table, said it would keep facilitating dialogue and urged both countries to continue respecting the temporary truce.
“It is imperative that the parties continue to uphold their commitment to ceasefire,” Foreign Minister Ishaq Dar said.
Uranium stockpile
US news website Axios quoted an unnamed source briefed on the negotiations as saying that disagreements included “Iran’s demand to control the Strait of Hormuz and refusal to give up on its enriched uranium stockpile”.
UK health minister Wes Streeting, speaking for the British government, told Sky News that the failure of the talks was disappointing but “that doesn’t mean there isn’t merit in continuing to try”.
The United States and Israel attacked Iran on February 28, sparking retaliation from Tehran that has plunged the Middle East into conflict and shaken the global economy.
Iran and the US had entered the talks mediated by Pakistan with maximalist positions, with Washington piling pressure by saying it had sent minesweeping ships through the vital Strait of Hormuz maritime route.
Signs of strain in the negotiations appeared when Iranian media accused the United States of making “excessive demands” over the strait, through which one-fifth of the world’s oil transited before its effective closure by Iran during the war.
US President Donald Trump had also insisted several hours into the talks on Saturday that the United States had already triumphed on the battlefield by killing Iranian leaders and destroying key military infrastructure.
“Whether we make a deal or not makes no difference to me. The reason is because we’ve won,” Trump said.
Leverage
The high-stakes 21-hour meeting had unfolded in Islamabad with both sides exhibiting intense mistrust.
Iran was in the middle of negotiations in February with Trump’s real-estate friend Steve Witkoff and son-in-law Jared Kushner when the US and Israel attacked.
Both Kushner and Witkoff were part of Vance’s team in Pakistan.
The first salvos of the war killed Iran’s supreme leader Ali Khamenei.
Iranian demands for any agreement to end the war include unfreezing sanctioned Iranian assets and ending Israel’s war against Hezbollah in Lebanon. The opening of the Strait of Hormuz has also presented a friction point.
Iran throughout the war exercised global economic leverage by asserting control of the maritime route, sending oil prices soaring and piling political pressure on Trump as US fuel costs rose.
The US military said Saturday that two Navy warships transited through the strait to begin clearing it of mines and ensure it is a “safe pathway” for tankers.
The Iranian military denied that any American warships had entered the waterway and threatened to respond if they do so.
The Revolutionary Guards’ Naval Command said Iranian promises of safe passage during a two-week ceasefire applied only to “civilian vessels under specific conditions”.
Lebanon violence
A complicating factor has been Israel’s assertion that the ceasefire does not affect Lebanon, where the Israeli military has launched strikes and a ground invasion in response to rocket fire from Hezbollah, the Iranian-backed movement.
Lebanese authorities said Israeli strikes on the country’s south on Saturday killed 18 people, bringing the death toll from Israel’s operations since the war broke out past 2,000.
Israel and Lebanon will hold their own talks next week in Washington. Israeli Prime Minister Benjamin Netanyahu said on Saturday that he wanted a peace deal with Lebanon that “will last for generations”.
But Israel has ruled out a ceasefire with Hezbollah, signalling it will instead seek to pressure the historically weak central government in Beirut.