Iran offered a plan to reopen the strategic Strait of Hormuz, Tehran said on Friday, but US President Donald Trump said he rejected the proposal.

The waterway, key to the world’s oil supply, is central to the conflict between the United States and Iran, which is at a stalemate after nearly seven months. But new mediation efforts at the UN’s gathering of world leaders in New York this week offered some optimism of progress toward a deal.

Iran’s Foreign Minister Abbas Araghchi met for talks on Tuesday with Trump’s envoy Steve Witkoff, and previously set out conditions for ending the war and reopening the vital shipping channel.

“Iran has conveyed to the United States, through Qatar, a concrete seven-day plan. If the necessary conditions are met, the strait can be reopened, and normal maritime passage restored within seven days,” Araghchi said at the UN.

“The choice now rests with the United States. Iran does not accept coercion, threats, or intimidation, and Iran will not surrender its sovereign rights under pressure.”

However, Trump told reporters at the White House that “They (Iran) made a proposal, but I rejected it.”

“They want to make a deal where they open the Strait immediately because they’re losing so badly,” he added. “They want to make a deal and I think that’s fine. I like making a deal too.”

Trump added that Tehran was facing financial pressure, claiming that they made the proposal because “they are dying — the money isn’t coming in.

“They got themselves into a bind; we have established the greatest blockade in military history — it’s a wall of steel. And now they have no money because they wanted to close the strait,” he added.

Earlier today, The Wall Street Journal reported Trump had rejected the proposal, citing US officials familiar with the matter.

The report noted that the 80-year-old president was sceptical Tehran would meet his demands and added he sees a renewed bombing campaign as likely.

Trump also posted an image to his Truth Social platform of a map showing the Strait of Hormuz circled and labelled “Trump Strait.”

Earlier media reports suggested the new plan calls for a cessation of all hostilities in the Middle East for seven days, including in Lebanon.

Frozen assets

It also reportedly calls for the release of frozen Iranian assets estimated to be worth at least $12 billion, as well as the lifting of sanctions on Iranian oil and an end to the US naval blockade of Iran.

On the seventh day of the truce, Iran would reopen Hormuz.

Iranian President Masoud Pezeshkian said in an interview with broadcaster CBS that the ceasefire “process will begin from the very day they accept it.”

“We had previously reached an agreement based on the MOU that was signed in Pakistan … if the United States agrees to proceed in that way, everything will return to the way it was before,” he added.

Hossein Mohebi, a spokesman for the Revolutionary Guards, told AFP in an exclusive interview on Tuesday that ending hostilities in Yemen was also among Tehran’s demands.

The US and Iran signed a Pakistani-mediated memorandum of understanding in June that aimed to end the war, reopen the strait and launch talks on Iran’s nuclear programme.

But the deal broke down shortly afterwards when Iran fired on commercial ships in Hormuz that it accused of deviating from its approved route through the waterway.

Iran requires ships to obtain authorisation before passage, citing security and sovereignty reasons.

Ships that refuse to comply are regularly targeted, while the United States sporadically bombs Iranian coastal areas in retaliation.