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The escalating conflict surrounding the Strait of Hormuz took another dramatic turn Sunday. President Donald Trump publicly rejected Iran’s latest response to a U.S.-backed peace proposal aimed at ending months of fighting that has destabilized global energy markets and heightened fears of a broader Middle East war.

Despite ongoing tensions, two commercial vessels were allowed to pass through the strategically critical Strait of Hormuz, offering a small sign that diplomatic channels may still be open.

Iran Proposes Strait of Hormuz  Peace Plan

Trump sharply criticized Tehran’s response in a post on Truth Social, writing: “I have just read the response from Iran’s so-called ‘Representatives.’ I don’t like it — TOTALLY UNACCEPTABLE.”

The president did not elaborate on which parts of Iran’s proposal prompted the rejection, but Iranian state media indicated that Tehran’s response focused heavily on ending hostilities across the region, ensuring safe passage through the Strait of Hormuz, and securing guarantees against future military action.

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Iran Pushes for Ending War and Sanctions Relief

According to Iran’s semi-official Tasnim News Agency, Tehran’s counterproposal included several major demands:

• An immediate end to military operations on all fronts
• Removal of the U.S. naval blockade
• Guarantees against future attacks on Iranian territory
• Lifting of U.S. sanctions, including restrictions on Iranian oil exports

The proposal reportedly also addressed concerns surrounding Iran’s nuclear program. The Wall Street Journal cited unnamed officials saying Iran offered to dilute part of its highly enriched uranium stockpile while transferring the remainder to a third-party nation.

Pakistan, which has emerged as a key mediator during the crisis, reportedly forwarded Tehran’s response to Washington. Pakistani officials confirmed their involvement but said there had been no immediate U.S. reply beyond Trump’s public criticism.

Strait of Hormuz Global Flashpoint

The Strait of Hormuz remains one of the world’s most strategically vital shipping lanes. Before the conflict erupted earlier this year, roughly one-fifth of the world’s oil supply passed through the narrow waterway connecting the Persian Gulf to international markets.

Iran has effectively restricted much non-Iranian commercial shipping through the strait since the war between U.S.-Israeli forces and Tehran-aligned groups intensified in February.

Still, there were signs Sunday that limited shipping traffic may be resuming.

Strait of Hormuz creates Pakistan Crisis

The QatarEnergy-operated liquefied natural gas carrier Al Kharaitiyat safely crossed the strait and headed toward Pakistan’s Port Qasim, according to shipping analytics company Kpler. It marked the first Qatari LNG vessel to transit the route since fighting escalated earlier this year.

A second vessel, a Panama-flagged bulk carrier bound for Brazil, also completed passage after reportedly following a route designated by Iranian military authorities.

Analysts say the successful crossings could represent a confidence-building measure involving mediators including Pakistan and Qatar.

Regional Tensions Continue 

Although a fragile ceasefire has technically been in place for roughly a month, the region remains highly volatile.

On Sunday:

• United Arab Emirates said it intercepted two drones launched from Iran.
• Qatar condemned a drone strike targeting a cargo vessel in its territorial waters.
• Kuwait reported hostile drones entering its airspace before being intercepted.

Military confrontations around the strait have intensified in recent days. Iranian forces and U.S. naval vessels reportedly engaged in sporadic clashes, while attacks linked to Iran-backed groups continued in southern Lebanon.

Israel's Involvement in Strait of Hormuz

Israeli Prime Minister Benjamin Netanyahu said the conflict could not end until Iran’s uranium enrichment capabilities and ballistic missile infrastructure were dismantled.

“There is more work to be done,” Netanyahu said during remarks aired Sunday.

Meanwhile, Trump appeared to signal caution despite claiming military gains against Iran.

“They are defeated, but that doesn't mean they're done,” the president said in televised comments.

Britain and France Naval Response

The worsening security crisis has prompted growing concern among Western allies over the safety of commercial shipping routes.

United Kingdom announced Saturday that it would deploy a Royal Navy warship to the Middle East in preparation for a possible international maritime security mission in the Strait of Hormuz. France has taken similar steps.

The move immediately drew condemnation from Tehran.

Iranian Deputy Foreign Minister Kazem Gharibabadi warned that any deployment of British or French warships under the pretext of “protecting shipping” would be viewed as an escalation.

He said such actions would receive a “decisive response.”

The Royal Navy has not publicly disclosed operational details regarding the deployment.

Economic Pressure Builds Worldwide

The continuing instability around the Strait of Hormuz has triggered major disruptions to global energy markets.

Oil prices have surged amid fears that a prolonged blockade could choke off energy exports from Gulf nations. Rising gasoline prices have also become a growing political issue in the United States, placing additional pressure on the Trump administration.

Several NATO allies have reportedly refused U.S. requests to participate in operations aimed at reopening the strait without a broader international mandate or comprehensive peace agreement.

Domestically, congressional Democrats have intensified criticism of the administration’s handling of the conflict.

As Trump prepares for a high-stakes diplomatic visit to China later this week, global leaders are increasingly pushing for a resolution to a conflict that threatens worldwide trade, energy security, and regional stability.