U.S. President Donald Trump said he would indefinitely extend the ceasefire with Iran to allow for further peace talks, although it was not ​clear on Wednesday if Iran or Israel, the U.S. ally in the two-month war, would agree, Reuters reported.

Trump said in a statement on social media the U.S. had agreed to a request by Pakistani ‌mediators “to hold our Attack on the Country of Iran until such time as their leaders and representatives can come up with a unified proposal … and discussions are concluded, one way or the other.”

Pakistan’s leaders have hosted peace talks in Islamabad to end a war that has killed thousands of people and shaken the global economy.

But even as he announced what appeared to be a unilateral ceasefire extension, Trump also said he would continue the U.S. Navy’s blockade of Iran’s trade by sea, considered an act of war by Iran.

There was ​no response early on Wednesday to Trump’s announcement from senior Iranian officials, although some initial reactions from Tehran suggested Trump’s comments were being treated skeptically.

Tasnim News Agency, affiliated with the Islamic Revolutionary Guards Corps, said ​Iran had not asked for a ceasefire extension and repeated threats to break the U.S. blockade by force. An adviser to Iran’s lead negotiator, the speaker of parliament ⁠Mohammad Baqer Qalibaf, said Trump’s announcement carried little weight and may be a ploy.

Trump’s wartime rhetoric has veered between extremes. In an expletive-filled threat against Iran only two weeks ago he promised that a “whole civilization will die tonight”, ​while at other times he has appeared keen to end the violence and market uncertainty, read the report.

With his announcement, Trump again pulled back at the last moment from his threats to bomb Iran’s power plants and bridges. United Nations Secretary General António Guterres ​and others have condemned those threats, noting international humanitarian law forbids attacks targeting civilians and civilian infrastructure.

The U.S. and Israel began the war on February 28 with aerial bombardments of Iran. The conflict quickly spread to Gulf states that host U.S. military bases and to Lebanon once the Iran-allied militant group Hezbollah joined the fighting.

Israeli Prime Minister Benjamin Netanyahu has for decades sought to oust Iran’s leadership, but Trump has given shifting and sometimes contradictory rationales for joining Israel to launch the war and how he ​foresees it ending, stirring confusion in global markets.

U.S. stock futures rose, the dollar wavered and oil prices turned lower on Wednesday after Trump’s announcement.

More than 5,000 civilians have been killed across the region and hundreds of thousands displaced so ​far, mostly in Iran and Lebanon, and the war has led to the virtual closure of the Strait of Hormuz, a vital chokepoint in global energy markets between Iran and Oman, sending oil prices soaring and fears that the global economy could ‌enter a recession.

Iran ⁠has repeatedly exploited its ability to control the passage of oil tankers and other ships in the strait in response to U.S. and Israeli attacks.

Trump said in his statement he was willing to extend the ceasefire because “the Government of Iran is seriously fractured, not unexpectedly so,” a reference to U.S.-Israeli assassinations of some of the country’s leaders in the war’s first weeks, including the late Supreme Leader Ayatollah Ali Khamenei, who has been succeeded by his son, Reuters reported.

A few hours before his announcement, Trump had told the CNBC news channel that he was not inclined to continue the temporary truce and the U.S. military was “raring to go.”

Those comments came as tentatively scheduled peace talks in Islamabad seemed on the ​verge of falling apart: U.S. Vice President JD Vance, ​whose presence has been requested by the Iranians, ⁠had planned to return to Pakistan on Tuesday but a White House official said he had not yet departed Washington and was taking part in additional policy meetings.

Before Trump’s latest announcement, a senior Iranian official told Reuters that Iran’s negotiators had been willing to attend another round of talks if the U.S. abandoned a policy of pressure and ​threats, and rejected negotiations aimed at surrender.

Iran has condemned the U.S. Navy intercepting and seizing two commercial Iranian ships at sea as part of its blockade, the second ​earlier on Tuesday, with its ⁠foreign ministry accusing the U.S. of “piracy at sea and state terrorism.” The U.S., joined by multiple other countries, has condemned Iran for impeding freedom of navigation in the Strait of Hormuz.

Hours after extending the ceasefire, Trump doubled down on the U.S. blockade, saying in a social media post that lifting it would undermine any chance of a peace deal “unless we blow up the rest of their Country, their leaders included.”

A first session of talks 10 days ago produced no agreement, with much ⁠of the focus ​on Iran’s stockpiles of highly enriched uranium, read the report.

Trump wants to take the uranium out of Iran in order to prevent the country from enriching ​it further to the point where it could develop a nuclear weapon. Iran says it has only a peaceful civilian nuclear program and a sovereign right to continue that as a signatory of the nuclear weapons non-proliferation treaty.

President Donald Trump said on Monday he believed ​a nuclear deal the U.S. is currently negotiating with Iranwill be better ‌than a 2015 international agreement to curb Tehran’s nuclear program, Reuters reported.

“The DEAL that we are making with Iran will be FAR BETTER than the JCPOA, commonly ​referred to as ‘The Iran Nuclear Deal’,” Trump wrote in ​a social media post after concerns expressed by Democrats and ⁠some nuclear experts that he is rushing negotiations on ​a highly complex topic.

During his first White House term, Trump in 2018 ​withdrew from the Joint Comprehensive Plan of Action agreed to by Iran, the United States and world powers, calling it “the worst deal ever.”

The United ​States and Israel began attacking Iran more than seven weeks ​ago in a conflict that Trump has said aims to prevent Iran ‌from ⁠getting a nuclear weapon.

With a two-week ceasefire set to expire in the coming days, prospects for a second round of talks between the U.S. and Iran in Pakistan were not clear, read the report.

“I ​am under no ​pressure whatsoever, ⁠although, it will all happen, relatively quickly!” Trump added in a Truth Social post.

It is ​currently unclear what kind of deal could be ​credibly ⁠agreed to by the United States and Iran in a short amount of time. The 2015 agreement, which also involved France, ⁠Germany, China, ​Britain and Russia, took two years ​to negotiate and involved some 200 specialists spanning nuclear physics, sanctions, finance and ​law.

The United Arab Emirates has held discussions with the United States over securing a potential financial backstop as the fallout from the Iran conflict threatens to strain its economy, according to a report by The Wall Street Journal.

Citing U.S. officials, the report said the idea of support measures — including a possible currency swap arrangement — was raised by UAE Central Bank Governor Khaled Mohamed Balama during meetings in Washington with Treasury Secretary Scott Bessent, as well as officials from the Treasury and the Federal Reserve.

Emirati officials indicated that while the UAE has so far avoided the most severe economic impacts of the conflict, it may require financial support if conditions worsen. They also signalled that tighter dollar liquidity could push the country to use alternative currencies, including the Chinese yuan, for oil sales and other transactions.

Oil disruption and capital risks

The talks come as the conflict has disrupted key sectors of the UAE economy. Damage to energy infrastructure and restrictions on tanker traffic through the Strait of Hormuz have affected a major source of dollar-denominated revenue.

Officials cited in the report also pointed to rising risks of capital flight and market volatility, potentially challenging the UAE’s role as a regional financial hub.

The Emirati dirham remains pegged to the U.S. dollar and is supported by foreign currency reserves estimated at around $270 billion. However, analysts say the conflict has increased pressure through capital outflows and broader economic disruption.

US cautious on swap arrangements

Currency swap lines, typically managed by the Federal Reserve, are extended selectively during periods of financial stress. The Fed maintains standing arrangements with major economies including the UK, Japan, Canada, Switzerland and the euro area.

According to the report, U.S. officials said the Federal Open Market Committee is unlikely to approve a swap line for the UAE, citing relatively limited financial integration with U.S. markets.

During previous crises — including the 2008 global financial crisis and the COVID-19 pandemic — the Federal Reserve expanded swap facilities to stabilise global dollar funding markets. The U.S. Treasury has also provided alternative support in some cases, including a $20 billion swap arrangement for Argentina through the Exchange Stabilization Fund last year.

Regional impact and financial measures

The discussions follow a period of intense hostilities before a ceasefire took effect on April 17. UAE authorities said Iran launched more than 2,800 drones and missiles during the conflict, most of which were intercepted.

The disruption to oil flows forms part of a broader regional shock, which the International Energy Agency has described as one of the most severe supply disruptions on record.

Gulf states have moved to bolster liquidity in response. Abu Dhabi raised around $4 billion through private placements earlier this month, while Bahrain established an estimated $5 billion swap line with the UAE to support financial stability, the WSJ reported.

Outlook and policy considerations

A recent report by S&P Global said the UAE’s strong fiscal and external buffers should help absorb economic shocks, but warned that prolonged disruption to oil exports and infrastructure damage could weigh on the outlook.

The UAE has also considered measures such as freezing Iranian assets held within the country, a step that could further affect trade and financial flows.

Finance ministers and central bankers attending meetings of the International Monetary Fund and the World Bank in Washington said recovery is unlikely to be immediate. Saudi Finance Minister Mohammed Al-Jadaan noted that logistical disruptions to oil shipments could persist for weeks even after hostilities subside.

U.S. Treasury officials have also asked Gulf countries to outline reconstruction and financing needs, signalling readiness to provide support if required.