War by Tweet: Trump's Three-Word Verdict Kills Iran Peace Talks as the Gulf Holds Its Breath

The Pakistan-mediated effort to end the 72-day-old US-Iran war teetered on the edge of collapse on Monday after President Donald Trump publicly and emphatically rejected Tehran's reply to the latest American peace proposal. Iran, through Pakistani mediators, delivered its response on Sunday, and Trump wasted no time in dismissing it. “I have just read the response from Iran’s so-called ‘Representatives,’” he wrote on Truth Social, calling it “TOTALLY UNACCEPTABLE!” Earlier, he had accused Tehran of “playing games with the United States, and the rest of the World.”

Iranian state television reported that Tehran rejected the US proposal as amounting to “surrender,” insisting instead on war reparations, full Iranian sovereignty over the Strait of Hormuz, an end to sanctions, and the release of seized Iranian assets. Tehran’s Foreign Ministry spokesperson said Iran had decided to “focus on ending the war” as the primary concern for the region and the international community, making clear it would not negotiate its nuclear programme until hostilities formally ceased, a condition Washington has flatly refused. US Ambassador to the UN Mike Waltz underscored America’s position on Fox News, saying Trump “has been clear they will never have a nuclear weapon and they cannot hold the world’s economies hostage,” while not ruling out a resumption of hostilities if diplomacy fails.

The breakdown deals a major blow to Pakistan’s months-long mediation effort, the so-called “Islamabad process” , which brokered the original two-week ceasefire on April 8 and hosted 21 hours of direct talks between the two sides last month. Mohammed Al-Thani met last Friday in Washington with Vice President JD Vance , Secretary of State Marco Rubio , and envoy Steve Witkoff , while also speaking with regional leaders including Pakistan Prime Minister Shehbaz Sharif . Those diplomatic efforts now appear to have stalled.

On the nuclear question, Benjamin Netanyahu spoke with Trump on Sunday evening and Trump agreed that it was necessary to remove Iran’s stockpile of enriched uranium , marking a significant hardening of the US position. Netanyahu separately stated the war is “not over” until Iran’s nuclear materials and proxy networks are fully dismantled. In a striking aside, Netanyahu also said he wants to reduce US military funding to Israel from $3.8 billion a year “to zero.”

On the ground, the ceasefire continued its slow-motion unravelling. The UAE said its air defences have now intercepted 550 ballistic missiles, nearly 30 cruise missiles, and more than 2,200 drones since the war began, with two fresh Iranian drones intercepted on Sunday. Kuwait also reported “hostile drones” entering its airspace, while a drone triggered a small fire on a cargo ship off Qatar’s coast. Separately, Iran’s intelligence ministry claimed to have dismantled two Mossad-linked cells operating inside Iran. In Lebanon, Israeli airstrikes killed at least four people including a 78-year-old woman and her 11-year-old grandson in the village of Abba, while Israeli soldier Alexander Glovanyov was killed in fighting near the Lebanon border.

Markets reacted sharply to the diplomatic breakdown. Brent crude climbed 3.17% to $104.50 a barrel while US crude rose 3.21% to around $98.48. When asked whether combat operations against Iran had ended, Trump offered a chilling summary: “They are defeated, but that doesn’t mean they’re done.”