Qatar's mediation paying off? US and Iran reportedly reviewing new mediation proposal, Tehran responds "the ball is now in America's court"

A diplomat familiar with the matter said Iran and the US are reviewing the latest proposal from mediators to bridge differences and avert a new full-scale war. The diplomat, who requested anonymity because of the sensitivity of the topic, said Qatari mediators flew to Tehran on Monday for further talks with Iranian officials and returned late that night. The talks in the Iranian capital were positive, the diplomat said. Mohammad Bagher Ghalibaf, Iran's parliamentary speaker and a senior representative in negotiations with the US, told Iran's Fars news agency that Tehran had "given a strong and rational response" to the US. "The ball is now in America's court, and whether war can be avoided depends on the US," he added. Ghalibaf also reiterated that Iran was ready to hit back hard against any US or Israeli attack. The latest diplomatic push follows weeks of escalating tension in which Iran stepped up strikes on ships around the Strait of Hormuz, and US President Donald Trump hinted he could order a new round of bombing against the Islamic republic after Tuesday's midterm elections, in which Republicans are expected to lose a large number of congressional seats to the Democrats. Israeli Prime Minister Benjamin Netanyahu has repeatedly stressed in recent weeks that Iran needs "regime change". Reports on Sunday said he was pressing Trump to strike Iran immediately after the vote. Several US media outlets reported that the US carried out overnight strikes on targets on Iran's Qeshm island in the strait. The reports, citing unnamed US officials, said these were limited military operations aimed at ensuring ships could pass safely through the waterway; at least one was a response to Iran's Revolutionary Guards firing on a US warplane. The US has not publicly announced the strikes. Although oil prices have soared over the past month amid heightened tensions further damaging Trump's political standing among Americans they fell about 10 per cent on Monday on signs the White House was willing to give diplomacy more time. By the time of writing on Tuesday, Brent crude was up about 1 per cent at $105.70 a barrel, but still far below last week's closing price of nearly $118. Speaking to reporters in his closing remarks before the midterms, Trump said: "They want to make a deal, and it's possible." He added that oil prices had fallen because "it looks like things are moving along very smoothly". When a reporter shouted a follow-up asking whether he would resume military strikes after the election, Trump mouthed: "No." Earlier on Monday, Iranian President Masoud Pezeshkian said Supreme Leader Mojtaba Khamenei had granted his government more powers to advance peace talks. "We are trying to resolve the issue through dialogue, and in this regard the Supreme Leader has also granted the government certain powers," Pezeshkian was quoted as saying by Iran's official IRNA news agency. The Iranian president did not specify the scope of the new authority delegated by Khamenei, nor whether it signalled a broader shift in the Islamic republic's strategy. Trump has repeatedly said he would resolve the Iran conflict in the near term either by "reaching a deal" or "resuming large-scale strikes". The war began in late February when the US and Israel started bombing Iranian targets and killed several senior officials in the strikes, including former supreme leader Ali Khamenei. US officials initially said the war would last no more than four to six weeks, and Iran's continued resistance has left Trump increasingly frustrated. The war has caused chaos in the Gulf region, including retaliatory strikes against US allies such as the UAE, Saudi Arabia and Qatar. By attacking ships, Iran at one point effectively closed the Strait of Hormuz, driving up oil and liquefied natural gas prices. Rising fuel costs US diesel hit a record and average petrol prices topped $4 a gallon prompted Americans to turn against the conflict. After a ceasefire in early April, the two sides continued to exchange fire from time to time, but at a far lower intensity than in the first phase of the war. In June, the two sides reached a so-called "memorandum of understanding" aimed at leading to a formal peace, but the document collapsed within about two weeks. After his remarks on Monday, Trump wrote on social media: "Oil prices are plunging, down nearly $10 a barrel, a record, because the market believes the US and Iran will not go to war." Trump's vice-president, JD Vance, echoed the more dovish tone on Monday. "We've had several good conversations with the Iranians. Both the president and I are fairly optimistic about the prospects for a negotiated solution. Of course, the Iranians are always unpredictable," he told reporters. Significant differences appear to remain between the two warring sides. Tehran is demanding that the US lift its naval blockade of Iranian ports, commit to easing sanctions and unfreeze frozen assets; Washington is demanding concessions from Iran on its nuclear programme. Iranian Foreign Minister Abbas Araghchi, during a visit to Turkmenistan, said: "Consultations and deliberations have been highly intensive. We have put forward our own conditions and proposals, and everything depends on Washington's political rationality. If it intends to deceive and use force, they will face a fiercer and heavier response than ever before." Ali Vaez, Iran project director at the International Crisis Group, noted that the key to Iran's strategy is reaching an agreement that ensures the US and Israel will not attack again in the future. "Tehran is willing to negotiate an end to the war, but it wants more than a pause before the next round of hostilities. It is seeking a durable peace that restores its deterrence," he said. Khamenei has ordered his senior military commanders to prepare for a renewed confrontation with the US and Israel and to expand Tehran's retaliatory options. This worries the Gulf Arab states: a better-prepared Iran, once it strikes, could set off a more destructive war in the region, with the Gulf states ultimately bearing the impact.