Iran and US Remain Far Apart in Peace Talks as Pezeshkian Vows No Surrender

Iran and the United States remain far apart on how to end their war, but diplomacy must continue, a senior Iranian official said on Wednesday, after Iran's president told the UN General Assembly that Tehran would never surrender to US pressure.

President Masoud Pezeshkian, speaking in New York, condemned what he called "signs of a bullying mentality" from US President Donald Trump, who had used the same forum a day earlier to threaten to "annihilate" Iran. The duelling speeches at the annual UN gathering bookended the first shuttle talks between the two sides in months, though they appeared to yield no concessions in either side's public stance.

The senior Iranian official, speaking on condition of anonymity, said Tehran was reviewing Washington's response to its peace proposals, which prioritise lifting a US naval blockade on Iranian ports and reopening the Strait of Hormuz. "There are still many differences between the Iranian and US positions, but diplomacy is continuing," the official said.

US Secretary of State Marco Rubio told reporters that a deal with Iran would involve hard work over a period of time, adding that Trump also had military options. Washington has said it will impose secondary sanctions on any country that allows Iranian flights after Wednesday. Mohsen Rezaei, secretary of Iran's Supreme National Security Council, told state TV that Iran would ensure neighbouring countries' airports could not function if they stop Iranian flights.

In his address to the 193-member General Assembly, Pezeshkian focused on the US blockade of Iranian ports and the Strait of Hormuz, a conduit for a fifth of global oil and liquefied natural gas shipments before the war. "It cannot be the case that everyone benefits from the Strait of Hormuz while we are denied access to shipping through this waterway," he said. "The permanent deployment of hostile fleets and the expansion of the war will not lead to peace." He added that the Iranian people would not bow to pressure.

Iran wants to exert control over the strait and collect fees from ships using it. Washington rejects this, saying the strait must remain fully open to international shipping. Oil prices rose almost 2% on Wednesday in choppy trade as traders weighed the comments of Pezeshkian and Trump.

Trump argued on Tuesday that he had prevented Tehran from obtaining a nuclear weapon and could "annihilate the Islamic Republic" if no deal is reached. Pezeshkian reiterated Iran's position that it is not seeking nuclear weapons.

Iranian and US officials held their first known indirect talks on Tuesday since a ceasefire collapsed in July, with Iran's Foreign Minister Abbas Araqchi and US envoys Steve Witkoff and Jared Kushner communicating through mediators. Iranian Foreign Ministry spokesperson Esmail Baghaei said Tehran had conveyed conditions during a two-hour exchange of messages via a Qatari mediator, including an end to the war on all fronts, a halt to US "acts of aggression" and the release of frozen Iranian assets.

The diplomatic contact in New York caused a backlash in Iranian media associated with hardliners. An opinion piece in the semi-official Tasnim news agency, associated with the Revolutionary Guards, said Araqchi was wrong to have contacts with Witkoff and Kushner, calling it "a major gift to Trump" as Iran had already conveyed its terms. Iranian sources said the delegation had been ordered not to meet the Americans face-to-face by the Supreme National Security Council, a body that includes figures selected by Ayatollah Mojtaba Khamenei, the supreme leader. Khamenei has yet to appear in public since replacing his father, who was killed on the war's first day. One Iranian journalist covering the visit said some hardliners viewed the trip to New York itself as an insult to the memory of the slain leader, Ali Khamenei.

The war, launched by Trump in February alongside Israel as "Operation Epic Fury", has lasted nearly seven months, killing thousands of people, disrupting global energy supplies and spreading to other countries in the region, particularly Lebanon and more recently Yemen.

In the latest reported attack in the Strait of Hormuz, Britain's UKMTO maritime security agency said a cargo ship had been hit by projectiles, causing two casualties among the crew. The crew was evacuated and the ship was on fire and adrift.

Despite near-daily attacks, traffic through the strait has picked up in recent weeks. Oil producers pay shipping companies fees of as much as a quarter of a cargo's value to take the wartime risk of sailing through the strait with transponders switched off, before transferring crude to other vessels on the far side. Exports from the United Arab Emirates have recovered to pre-war levels, and Saudi Arabia has sold 60 million barrels of Gulf oil for both this month and next, to be delivered beyond the strait off the coast of Oman.

Nevertheless, a third of Gulf oil is estimated to be missing from global supplies. Shortages have particularly hit refined products such as diesel, causing inflation, pushing up interest rates and hurting Trump's Republicans.