Qatari mediators press peace deal between US and Iran

By Steve Holland and Menna AlaaElDin

WASHINGTON/CAIRO, Sept 29 (Reuters) - Qatar said on Tuesday it hopes that shuttle diplomacy between Iran and the US can lead to a breakthrough despite US President Donald Trump's denial of media reports that he was willing to ease sanctions and release frozen funds in exchange for Iranian concessions on its nuclear program.

"We are exchanging messages between the parties, and we're working towards establishing a common ground in order to get into a deal that would save all of us from the repercussions of the conflict," Qatari Foreign Ministry spokesperson Majed al-Ansari told reporters.

The US and Iran have failed to find an off-ramp from their war, now in its eighth month. Negotiations appeared to intensify during last week's UN General Assembly meeting in New York, but have so far not yielded any agreement to reopen the Strait of Hormuz.

Doha once again has emerged as would-be peacemaker after previously playing a supporting role in producing the June memorandum of understanding that led to a brief ceasefire. US and Iranian officials spoke separately with Qatari mediators on Monday. It was unclear if another exchange took place on Tuesday.

Trump repeated his position that Iran must not obtain a nuclear weapon and that the war would be over soon.

The conflict has degraded Iran's conventional forces and damaged its already ailing economy, but Tehran has fought back with missile and drone strikes on US allies in the Gulf and by restricting oil tanker traffic in the strategic Strait of Hormuz, which has pushed up world energy prices.

"I don't know if they are going to give up yet but they'll give up," Trump told reporters on Tuesday.

"They are doing very poorly," he added.

On Monday night, Trump took to social media to deny reports by Axios and CNN, citing unidentified US officials, that Trump was willing to give Iran sanctions relief and release frozen Iranian funds as part of a final deal on the condition that Iran showed "concrete progress" on the nuclear issue.

"This is untrue. I offered them NOTHING," Trump wrote on Truth Social.

Trump has cited preventing Tehran from acquiring a nuclear bomb as a central goal of the war, along with ending its ability to attack its neighbors and creating conditions for Iranians to topple their leadership.

Iran does not have nuclear weapons and denies it wants to develop them, but argues it has the right to a nuclear program for civilian purposes.

Iranian President Masoud Pezeshkian, in an interview with the CBS show "Face the Nation" that aired on Sunday, said Tehran was ready for talks on its nuclear program and other issues, but would not accept "bullying or coercion."

IRANIAN PEACE PROPOSAL

At the United Nations General Assembly last week, Iran floated a peace proposal thatwould trigger a seven-day countdown to reopening the strait and a pause in fighting.

Trump on Saturday rejected the plan although Iranian Foreign Minister Abbas Araqchi said on Sunday that Washington had not officially relayed a US rejection through mediators.

The war has killed thousands of people and severely disrupted global energy supplies, fueling inflation.

Saudi Arabia, the largest of the Gulf states, was drawn deeper into the war this month as Iranian-alignedHouthi fighters advanced in Yemen, routing forces of the Saudi-backed government and threatening Saudi oil exports through the Red Sea.

Oil prices settled 2.5%lower on Tuesday as investors focused on signs of recovering crude exports from the Middle East, but prices were still on track for monthly gains on lingering concern about supply disruptions.

The US government on Tuesday offered to loan energy companies up to 40 million barrels of oil from the Strategic Petroleum Reserve, the last US batch of crude from a global deal to unleash reserves in the wake of the Iran war.

The United States also stepped up its economic pressure on Iran,sanctioning 10 individuals and entities, including some based in China, Hong Kong and Pakistan, saying they helped Iran procure weapons and components.

(Reporting by Steve Holland and Kanishka Singh in Washington, Jana Choukeir in Dubai, and Menna AlaaElDin in Cairo; Writing by Michael Perry and Daniel Trotta; Editing by Lincoln Feast and Cynthia Osterman)