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New Iran peace proposal demands war reparations, US troop exit

by Reuters

DUBAI May 19, 2026 - 12:31 pm GMT+3
Women hold Iran's national flags during an anti-U.S. and Israel protest at Hafte Tir Square in Tehran, Iran, May 17, 2026. (AFP Photo)
Women hold Iran's national flags during an anti-U.S. and Israel protest at Hafte Tir Square in Tehran, Iran, May 17, 2026. (AFP Photo)
by Reuters May 19, 2026 12:31 pm

Tehran’s latest peace proposal to the U.S. calls for an end to hostilities across the region, including in Lebanon, the withdrawal of U.S. forces from areas near Iran and reparations for damage caused during the U.S.-Israeli war, Iranian state media reported Tuesday.

In Tehran's first comments on the proposal, Deputy ⁠Foreign Minister Kazem Gharibabadi said Tehran also sought the lifting of sanctions, the release of frozen funds and an end to the U.S. naval blockade on the country, according to IRNA news agency.

The terms as described in the Iranian reports ​appeared little changed from Iran's previous offer, which U.S. President Donald Trump rejected last week as "garbage."

Trump said ⁠Monday he had paused a planned resumption of attacks on Iran after Tehran sent a new peace proposal to Washington, and that there was now a "very good chance" of reaching a deal limiting Iran's nuclear program.

Reuters could not determine whether preparations had been made for strikes that would mark a renewal of the war Trump started in late February.

Under pressure to reach an accord that would reopen the Strait of Hormuz – a key supply route for global supplies of oil and other commodities – Trump has previously expressed hope that a deal was close on ending the conflict, and similarly threatened heavy strikes on Iran if Tehran did not reach a deal.

In a social media post, Trump said the leaders of Qatar, Saudi Arabia and the United Arab Emirates had requested that he hold off on the attack because "a Deal will be made, which will be very acceptable to the United States of America, as well as all Countries in the ⁠Middle ⁠East, and beyond."

Speaking to reporters later Monday, he said the United States would be satisfied if it could reach an agreement with Iran that prevented Tehran from obtaining a nuclear weapon.

"There seems to be a very good chance that they can work something out. If we can do that without bombing the hell out of them, I would be very happy," Trump told reporters.

A Pakistani source confirmed that Islamabad, which has conveyed messages between the sides since hosting the only round of peace talks last month, had shared the Iranian proposal with Washington.

The sides "keep changing their goalposts," the Pakistani source said, adding: "We don't have much time."

Mixed signals

Although neither side has publicly disclosed any concessions in negotiations that have been stalled for a month, a senior Iranian official suggested Monday ⁠that Washington may be softening some of its demands.

The source said the U.S. had agreed to release a quarter of Iran's frozen funds – totaling tens of billions of dollars – held in foreign banks. Iran wants all the assets released.

And the source said Washington had shown more flexibility in agreeing to let Iran continue some ​peaceful nuclear activity under the supervision of the International Atomic Energy Agency.

The U.S. has not confirmed that it has agreed to anything in the talks.

A ​U.S. official, speaking on condition of anonymity, denied a report by Iran's Tasnim news agency that Washington had agreed to waive oil sanctions on Iran while negotiations were underway.

The U.S.-Israeli bombing killed thousands of people in Iran before it was suspended ⁠in a cease-fire ‌in early April. ‌Israel has killed thousands more and driven hundreds of thousands from their homes in Lebanon, which ⁠it invaded in pursuit of the Iran-backed Hezbollah group. Iranian strikes on Israel and neighboring ‌Gulf states have killed dozens of people.

The Iran cease-fire has mostly held, although drones have lately been launched from Iraq toward Gulf countries, including Saudi Arabia and Kuwait, ​apparently by Iran and its allies.

Trump and Israeli Prime ⁠Minister Benjamin Netanyahu said they launched the war to curb Iran's support for regional armed groups, dismantle its ⁠nuclear program, destroy its missile capabilities and create conditions for Iranians to topple their rulers.

But the war has yet to deprive Iran of ⁠its stockpile of near-weapons-grade enriched uranium ​or its ability to threaten neighbors with missiles, drones and proxy groups.

The Islamic Republic's clerical leadership, which had faced a mass uprising at the start of the year, withstood the superpower onslaught with no sign of organized opposition.

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