The United States-Israeli war with Iran has reached a dangerous diplomatic inflection point. Contrary to US President Donald Trump’s expectations, neither military pressure nor economic coercion has produced Iran’s capitulation, but the war has created leverage that could ultimately support a negotiated settlement under certain conditions. Iran’s proposal to reopen the Strait of Hormuz in exchange for an end to the US blockade, sanctions relief, and a regional ceasefire creates a possible opening. However, deep mistrust, competing US and Iranian priorities, divergent foreign policy aims toward Iran on the part of the United States and Israel, and Israel’s continued military occupation of southern Lebanon make reaching a durable agreement extremely challenging.
A war without a clear endgame
The war has entered a new phase, even as its central contradiction has become more pronounced. US President Donald Trump is simultaneously threatening to “annihilate” Iran and suggesting that a settlement may be near. He has already announced dozens of times that the war was either won or on the precipice of ending. Iran, meanwhile, is warning that the war is not over while offering a concrete roadmap for reopening the Strait of Hormuz. Tehran has insisted repeatedly that it will not surrender, even as it maintains that the conflict can end through diplomacy.
Iran’s own messaging has been similarly contradictory. Tehran previously stated that it would not negotiate with the United States until President Trump leaves office, a position that would postpone talks until January 2029. More recently, however, Iranian President Masoud Pezeshkian announced that Iran would prefer to reach a deal and end the war before the upcoming midterm elections. The remarks appeared to respond directly to President Trump’s claim that the war would end immediately after the election. At the same time, President Trump’s top advisers are warning him that the conflict could continue throughout his entire term.
The war has therefore moved from an initial phase of major military confrontation into a prolonged struggle over leverage, economic pressure, and the terms of a settlement. President Trump has presented the conflict as a choice between an imposed agreement and further military action, while Iranian officials have argued that Washington is using pressure to force Iran’s surrender. The central question now is whether the latest diplomatic activity represents the beginning of a genuine off-ramp or merely another pause before renewed escalation.
From military confrontation to bargaining over Hormuz
The latest diplomatic opening emerged on the sidelines of the United Nations General Assembly, where United States and Iranian representatives held indirect talks in New York. The discussions followed sustained efforts by several Arab states, Qatar, Turkiye, and other regional actors to restore communication between the two governments. No agreement emerged from the meetings, and public threats and accusations continued. Their significance lies instead in the fact that Washington and Tehran remain willing to communicate despite months of military confrontation and the evident collapse of even the most tenuous and conditional trust between them.
Those interactions were given greater substance by Iran’s proposal for a seven-day roadmap to reopen the Strait of Hormuz. Iranian Foreign Minister Abbas Araghchi announced that Tehran had conveyed the plan to Washington through intermediaries. Under the reported proposal, the United States would ease or suspend its military pressure and blockade of Iranian ports, relax sanctions or restrictions on Iranian oil exports, and agree to a ceasefire extending to Lebanon and potentially other regional fronts. In return, Iran would reopen the Strait within seven days, after which negotiations over its nuclear program would resume.
The proposal makes Hormuz the central bargaining chip in the emerging diplomatic process. Iran is seeking relief from the economic pressure threatening its ability to sustain the war, while Washington wants the restoration of international shipping and continued leverage over Iran’s nuclear activities. Pressure to reopen the Strait continues to intensify as fuel prices surge to record highs in the United States while France reports 16 percent of its petrol stations have run out of fuel. JPMorgan also recently predicted a major global food crisis in the coming year in part as a result of shortages and supply chain bottlenecks stemming from the war.
Though the primary belligerents are the United States and Iran, the conflict cannot be treated as a strictly bilateral US-Iran confrontation. Fighting and instability involving Israel, Hezbollah, Lebanon, Yemen, Gulf states, and vital shipping routes have become interconnected. The fragile Israel-Hezbollah ceasefire is a particularly serious obstacle. Israel has continued to insist that it does not intend to withdraw from Lebanese territory, undermining the durability of any potential deal between the United States and Iran to bring an end to the war, while Iran has conditioned any agreement with Washington on a complete end to Israeli operations there. Later, after drawing sharp criticism for its plans in Lebanon, Israel said it would condition any withdrawal on the complete disarmament of Hezbollah, a demand Tel Aviv is aware is extremely unlikely to be fulfilled and therefore could function as thinly veiled justification for indefinite military occupation. Beirut, for its part, has called for enforcement of the ceasefire and an end to Israel’s military occupation of southern Lebanon.
Why diplomacy remains difficult
The central obstacle is that Washington and Tehran are negotiating different wars: Washington is seeking to use military pressure to impose a strategic settlement, while Tehran is fighting to survive that pressure without surrendering its sovereignty or regional position. For the United States, at this point following months of shifting objectives and justifications, the conflict is principally about restoring permanent access through the Strait of Hormuz, constraining Iran’s nuclear and missile programs, weakening its regional partnerships, and reestablishing American deterrence. Iran, by contrast, is seeking an end to the blockade and sanctions, recognition of its sovereignty and security interests, and guarantees that an agreement will not simply be followed by renewed US or Israeli attacks.
These competing objectives create an immediate sequencing problem. Washington wants Iran to make verifiable concessions before receiving meaningful sanctions relief. Tehran wants the blockade lifted and military pressure reduced before it commits to further concessions. Each side therefore views the other’s preferred first step as a dangerous concession made without adequate guarantees.
The problem is compounded by the collapse of earlier ceasefires and interim understandings, which has left both governments deeply distrustful. Iranian leaders regard negotiations conducted under bombardment and economic blockade as coercion rather than diplomacy, and engagement under those conditions would undermine the standing of Iran’s political leadership among their supporters at home. US officials, meanwhile, are likely to view Iran’s actions in the Strait of Hormuz, attacks on shipping, and support for regional armed groups as evidence that pressure must continue. The June memorandum of understanding showed that an interim framework was possible, but its collapse has made both sides wary of repeating the process.
Likely scenarios
The most likely near-term outcome is a managed stalemate rather than a comprehensive agreement or a return to full-scale war. The recent talks may produce temporary arrangements governing shipping, sanctions, or specific military activities, but neither Washington nor Tehran appears prepared to make the concessions required for a durable settlement. This deadlock is all the more pronounced because the durability of any agreement would require that the United States secures Israel’s buy-in, which remains very unlikely given the history of Israeli engagement in direct violations of ceasefires meant to limit their military activity in the region. The result could be a cycle of intermittent strikes, partial ceasefires, economic pressure, and renewed negotiations, keeping the conflict below the threshold of total war without actually ending it.
Such an arrangement would allow both sides to claim that they had not capitulated. Washington could maintain sanctions and a robust military presence in the region, and Tehran could preserve its leverage over the Strait of Hormuz and continue demanding an end to the blockade and attacks on Iran and its regional partners. The unresolved conflict in Lebanon would remain a major source of instability, particularly if Israel continues to reject withdrawal from southern Lebanon and Iran insists that the fighting there be included in any settlement.
A limited phased agreement remains the most plausible diplomatic alternative to this stalemate. Iran’s proposal to reopen Hormuz in exchange for reduced military pressure, sanctions relief, and renewed nuclear talks could provide a basis for temporary de-escalation. But the collapse of the earlier June memorandum demonstrates how fragile such arrangements are.
The most dangerous scenario is renewed escalation. If Washington rejects Iran’s sequencing demands, or if attacks involving Israel, Hezbollah, the Houthis, or commercial shipping derail the talks, both sides could resume broader military operations. The forces assembled in the region and the absence of trust mean that even a limited incident could rapidly destroy the remaining diplomatic channel.
What a diplomatic solution would require
The conflict has already exposed the limits of military coercion against Iran. Tehran has spent decades preparing for a prolonged direct confrontation with the United States, and its ability to absorb damage without capitulating has been a defining feature of the war. A 2002 U.S. military war game reached a similar conclusion when an Iran-like adversary overwhelmed the American force in the exercise, only for the results to be revised and the exercise controversially declared a success. The episode illustrated the danger of assuming that technological superiority can overcome a decentralized and adaptive opponent. Public threats and demands for surrender are therefore unlikely to produce the desired result. For Iran’s leaders, yielding under direct American and Israeli pressure would carry profound domestic political risks, making continued resistance safer than appearing to submit.
Diplomacy will consequently need to begin by restoring the conditions for credible negotiation. The first phase should include a verified regional ceasefire, an end to attacks on commercial shipping, suspension of the U.S. naval blockade, humanitarian and economic relief for Iran, and the withdrawal of Israeli forces from Lebanese territory. Without an end to Israel’s occupation of southern Lebanon, Tehran is unlikely to regard any broader agreement as genuine.
A subsequent nuclear agreement would be likely to resemble the JCPOA but could potentially contain terms more favorable to Iran because Tehran currently holds significant leverage via the Strait of Hormuz, while Trump faces mounting political pressure before the midterm elections, particularly his fear that a Republican defeat could expose him to serious legal or political consequences. Given the collapse of the earlier agreement and the use of force despite Iran’s diplomatic engagement, Tehran would likely also demand immediate sanctions relief and stronger protections against unilateral abrogation. In return, it could accept limits on enrichment, stockpiles, and advanced centrifuges, alongside intrusive international inspections.
The choices that remain
Military pressure has created leverage, but it has not produced a sustainable political outcome. Iran’s proposal to reopen the Strait of Hormuz may be tactical, but it gives diplomacy a concrete starting point. The immediate objective should therefore not be an ambitious “grand bargain,” but a verifiable pause that prevents the war from expanding and creates the conditions for more difficult negotiations over Iran’s nuclear program, regional security, and the future of US-Iran relations.
The decisive question is whether Washington and Tehran can accept a limited agreement that falls short of total victory, or whether both will continue escalating in pursuit of terms the other side cannot accept. The war has already demonstrated the limits of coercion. What remains uncertain is whether its participants are prepared to negotiate within those limits.
Sahar Razavi is an Associate Professor in the Department of Political Science and the Director of the Iranian and Middle Eastern Studies Center at California State University, Sacramento.
