(Bloomberg) — The United States and Iran ended without reaching an agreement, putting a fragile ceasefire at risk and raising doubts about efforts to end a six-week war that has killed thousands of people and disrupted global energy supplies.
Vice President JD Vance, who led the American delegation, said he is returning home without a deal after Iran refused to commit not to seek a nuclear weapon.
“We have made it very clear what our red lines are, where we are willing to compromise and where we are not,” Vance told reporters early Sunday in Islamabad. “And we made that as clear as possible, and they chose not to accept our terms.”
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Semi-official Iranian media cited “excessive” US demands, while the Foreign Ministry said it was natural that differences would not be resolved in a single round of negotiations, leaving open the possibility of further discussions.
The abrupt end of negotiations, after 21 hours of talks, leaves the two-week ceasefire signed last week in suspense. US President Donald Trump has not yet commented, although he posted news on social media about a naval blockade that could impede Iran’s oil exports through the strategic Strait of Hormuz. The sea lane remains a key point of contention, with Tehran insisting on maintaining its control after halting vessel traffic – responsible for a fifth of global oil and liquefied natural gas supplies – following the war between the US and Israel that began in late February.
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“Given the maximalist demands on both sides, the negotiations were doomed to failure,” said Jean-Loup Samaan, a senior fellow at the Middle East Institute at the National University of Singapore, citing disagreements over Hormuz and Iran’s nuclear program. “So far there are no signs that Iran is willing to review its position on these issues. But overall, this could quickly lead to a resumption of war.”
The absence of a deal is “bad news for Iran much more than it is for the US,” Vance said on Sunday before leaving Islamabad, where the talks were taking place.
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“We leave here with a very simple proposal, an understanding that it is our final and best offer,” Vance said. “We will see if the Iranians accept it.”
The two sides reached understandings on several issues, but disagreements remained “on two or three key points,” Iranian Foreign Ministry spokesman Esmail Baghaei said.
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“It was natural not to expect an agreement in a single session from the beginning,” he told state television after the talks. “Diplomacy never ends” and Iran will continue to “defend national interests under all circumstances,” he added.
The US sought concessions it failed to obtain during the war, including issues related to the Strait of Hormuz and the removal of nuclear materials, the semi-official Tasnim news agency reported.
Failure to reach a deal after lengthy negotiations is likely to affect oil and gas markets on Monday. Two empty supertankers attempted to cross Hormuz into the Persian Gulf on Sunday, but made a last-minute U-turn just as U.S.-Iran peace talks ended.
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“Hope had been rising cautiously last week, but this could see us return to pre-ceasefire levels,” said Nick Twidale, chief market analyst at AT Global Markets in Sydney. “I believe we will see oil open higher, along with the dollar.”
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Pakistan said the talks were “constructive” and called on both sides to maintain the ceasefire, saying it would continue to facilitate dialogue between the US and Iran in the coming days.
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In a first reaction from an Israeli official, Cabinet Minister for Security Zeev Elkin told Army Radio that the two-week ceasefire period has not yet ended and that “it is possible that there will be attempts to promote further negotiations.”
The Israel Defense Forces continued its attacks over the weekend against Hezbollah in Lebanon, where it is waging a parallel war against the Iran-aligned group. More than 200 attacks were carried out to target Hezbollah infrastructure and provide air support to Israeli troops in southern Lebanon, the army said on Saturday.
Vance arrived in Islamabad on Saturday and was accompanied by Jared Kushner and Steve Witkoff to negotiate with a 71-member Iranian delegation led by Parliament Speaker Mohammad-Bagher Ghalibaf.
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“We need to see a clear commitment that they will not seek a nuclear weapon and will not seek the means that would allow them to obtain it quickly,” Vance said. “That is the central objective of the president of the United States, and that is what we tried to achieve in these negotiations.”
Michael Kugelman, senior South Asia fellow at the Atlantic Council, said the high level of negotiations demonstrates the US commitment to reaching a peace agreement, and that there will likely be renewed efforts towards a resolution.
“The US, for internal political reasons, wants an agreement that allows it to exit the war,” he wrote on the X network. “Despite Vance’s comments, this is probably not over. More negotiations could happen,” although it is unclear whether they will take place in Pakistan or elsewhere.
Direct negotiations began at 5:30 pm on Saturday in the Pakistani capital. A team of technical experts joined the meetings after the first hour, with discussions focused on the Strait of Hormuz, a possible extension of the ceasefire and gradual easing of sanctions, according to U.S. and Pakistani officials.
Trump, who said containing Iran’s nuclear ambitions was one of the reasons for the war, downplayed the importance of the talks on Saturday night. As he left the White House to watch a UFC fight in Miami, he declared: “Whether we make a deal or not makes no difference to me. And the reason is that we already won.”
Ghalibaf expressed caution before the negotiations began, saying upon arrival in Islamabad that “we have good will, but we do not have confidence”.
“The heavy loss of our leaders, loved ones and compatriots has only strengthened our resolve to defend the rights and interests of the Iranian people even more firmly,” Baghaei said.
Iran also insisted that a ceasefire in Lebanon should be a precondition for negotiations.
Israeli Prime Minister Benjamin Netanyahu, who was not involved in the talks in Islamabad, said enriched nuclear material must be removed from Iran with or without a deal.
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Israel accuses Iran of seeking nuclear weapons, an accusation Tehran denies.
The war in the Middle East has left more than 5,600 people dead, according to governments and non-governmental organizations. More than 3,600 people have died in Iran, according to estimates by the Human Rights Activists News Agency, while more than 2,000 have died in Lebanon, according to the government.
Israel says it has killed more than 1,400 Hezbollah fighters, including 200 last Wednesday.
Israel has recorded around three dozen deaths, and similar numbers have been reported in Gulf Arab countries, according to official data. There were also dozens of casualties in Iraq. Thirteen American soldiers died, according to US Central Command.
Eric Martin, Catherine Lucey e Patrick Sykes
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