US President Donald Trump said on Wednesday he believed a deal with Iran was "very possible," but threatened to resume his bombardment of the country if negotiations fell apart.

Despite the US leader's optimism, Iran has yet to respond to a new US proposal, with its chief negotiator warning that Washington was seeking to force the Islamic republic's "surrender."

Positive signs that the foes could return to the table after weeks of deadlock grew after Trump halted a short-lived military operation to reopen the Strait of Hormuz, citing hopes for a deal.

Trump said on social media on Wednesday that if "Iran agrees to give what has been agreed to," the war would be over, but if not, the bombing would resume "at a much higher level and intensity."

"We've had very good talks over the last 24 hours, and it's very possible that we'll make a deal," Trump later told reporters in the Oval Office.

Iranian foreign ministry spokesman Esmaeil Baqaei told local media that the "US plan and proposal are still under review," and that Tehran would convey its position to mediator Pakistan "after finalising its views."

Mohammad Bagher Ghalibaf, Iran's parliament speaker who has taken the lead in negotiations with the US, warned on Wednesday that Washington "is seeking, through a naval blockade, economic pressure and media manipulation, to destroy the country's cohesion in order to force us to surrender."

The US military said a US Navy warplane on Wednesday fired on and disabled the rudder of an oil tanker that tried to break Washington's blockade of Iranian ports.

Trump had said the day before that the US blockade would remain in place as Tehran kept up its own chokehold on the Strait of Hormuz.

But citing progress towards a deal, he said a new effort to reopen the vital trade route "will be paused for a short period of time to see whether or not the Agreement can be finalised."

Pakistani Prime Minister Shehbaz Sharif, a key figure in an initial round of talks held in Islamabad last month, was optimistic on the prospects for a deal.

"We are very hopeful that the current momentum will lead to a lasting agreement that secures durable peace and stability for the region and beyond," he said on X.

US news outlet Axios, citing two US officials, reported that both sides were close to agreeing on a one-page memorandum of understanding to end the war and set a framework for more detailed nuclear negotiations.

In his remarks to PBS, Trump insisted Iran would hand over its enriched uranium to the US, without explaining how this key point of contention would be resolved.

Trump's more conciliatory tone came hours after US Secretary of State Marco Rubio said the US had completed its offensive operations against Iran.

Investors welcomed those remarks and the decision to pause the US effort to guide ships through the strait, with international oil benchmark Brent and West Texas Intermediate both tumbling below US$100 a barrel as stock markets rallied.

The stand-off in the vital waterway had led to claims of attacks by both sides earlier this week, in the sharpest escalation since a truce took effect on April 8.

Washington and Gulf countries have drafted a UN Security Council resolution demanding Tehran halt attacks, disclose mine locations and end efforts to charge tolls in the strait, Rubio said, with a vote expected in the coming days. (AFP)



Edited by Cecil Wong