Hopes of a diplomatic breakthrough in the U.S.-Israeli war with Iran receded as a new ‌week began, with talks aimed at ending the two-month conflict at a standstill and both Tehran and Washington showing little willingness to soften their terms.

Iranian Foreign Minister Abbas Araqchi left mediator Pakistan empty-handed at the weekend, and U.S. President Donald Trump canceled a planned visit ​to Islamabad by his envoys Steve Witkoff and Jared Kushner, dealing back-to-back blows to peace prospects, Reuters reported.

The deadlock ​leaves the world’s biggest economy and a major oil power locked in a confrontation that ⁠has already pushed energy prices to multi-year highs, stoked inflation and darkened global growth prospects.

Iranian President Masoud Pezeshkian told ​Pakistani Prime Minister Shehbaz Sharif by phone that Tehran would not enter “imposed negotiations” under threats or blockade, according to a ​statement from the Iranian government.

Pezeshkian said the United States should first remove “operational obstacles,” including its blockade on Iranian ports, before negotiators can lay any groundwork to resolve the conflict.

Araqchi described his visit to Pakistan as “very fruitful.” An Iranian diplomatic source in Islamabad said Tehran would ​not accept “maximalist demands” from the United States.

Trump told reporters in Florida that he scrapped the envoys’ visit because the talks ​involved too much travel and expense to consider an inadequate offer from the Iranians. After the diplomatic trip was called off, Iran “offered ‌a lot, ⁠but not enough,” Trump said.

On Truth Social, he wrote that there was “tremendous infighting and confusion” within Iran’s leadership.

“Nobody knows who is in charge, including them,” he posted. “Also, we have all the cards, they have none! If they want to talk, all they have to do is call!!!”

Pezeshkian said on Thursday that there were “no hardliners or moderates” in Tehran and ​that the country stood united ​behind its supreme leader. ⁠Iran’s top negotiator Mohammad Baqer Qalibaf and Araqchi echoed the message in recent days.

Adding to regional strains, Israeli Prime Minister Benjamin Netanyahu ordered his troops to attack Hezbollah targets in Lebanon, ​his office said, further testing a three-week ceasefire.

Tehran has largely closed the Strait of ​Hormuz, which normally ⁠carries one-fifth of global oil and liquefied natural gas shipments, while Washington blocks Iran’s oil exports.

White House press secretary Karoline Leavitt earlier said the U.S. had seen some progress from the Iranian side and that Vice President JD Vance was ready ⁠to travel ​to Pakistan. Vance led an unsuccessful first round of talks in ​Islamabad this month.

The U.S.-Iran conflict, in which a ceasefire is in force, began with U.S.-Israeli airstrikes on Iran on February 28. Iran has since struck ​Israel, U.S. bases and Gulf states.

Iranian Foreign Minister Abbas Araqchi arrived in the Pakistani capital Islamabad on Friday to discuss proposals ​for restarting peace talks with the U.S., offering some hope for an end to the eight-week war that has killed thousands and sown turmoil in global markets.

U.S. President Donald Trump told Reuters on Friday that Iran ‌plans to make an offer aimed at satisfying U.S. demands, but said he did not yet know what the offer entailed.

When asked who the U.S. was negotiating with, Trump said: “I don’t want to say that, but we’re dealing with the people that are in charge now.”

But Iran’s foreign ministry spokesperson said on X that Iranian officials did not plan to meet with U.S. representatives, even though U.S. special envoys Steve Witkoff and Jared Kushner planned to travel to Islamabad. Iran’s concerns would be conveyed to Pakistan, the spokesperson said.

After a U.S. bombing campaign and ​Iran’s blocking of the strategic Strait of Hormuz, the two countries are at a costly impasse, with Iran’s oil exports blocked and U.S. gasoline prices at multi-year highs.

Speaking before the Iranian foreign ministry’s statement, White House press ​secretary Karoline Leavitt said Witkoff and Kushner would leave for Pakistan on Saturday morning for talks with Araqchi.

Leavitt struck an upbeat tone, saying the U.S. had seen some progress from ⁠the Iranian side in recent days and hoped more would come this weekend.

She added that U.S. Vice President JD Vance, who earlier this month led a first round of unsuccessful talks with Iran to end their war, is ready to travel to ​Pakistan as well.

The White House did not immediately respond to a request for comment on the Iranian statement.

Pakistani sources said earlier that a U.S. logistics and security team was already in place in Islamabad for potential talks.

Pakistan’s foreign ministry confirmed Araqchi’s ​arrival in Islamabad, where a heavy military and paramilitary presence was visible across the central parts of the city.

Araqchi went straight into a meeting with Pakistani Foreign Minister Ishaq Dar at the Serena Hotel, where the first round of talks with the U.S. was held, two government sources said.

Qatar’s Emir Sheikh Tamim bin Hamad Al Thani pledged his country’s support for mediation efforts by Pakistan in a phone call with Trump, Qatar’s state news agency reported.

Araqchi wrote on X that he was visiting Pakistan, Oman and Russia to coordinate with partners on bilateral matters ​and consult on regional developments. The tour will include consultations on the latest efforts to end the war, Iran’s Foreign Ministry spokesperson later told state media.

U.S. Defense Secretary Pete Hegseth told a briefing earlier on Friday that Iran had a chance ​to make a “good deal” with the United States.

“Iran knows that they still have an open window to choose wisely,” he said. “All they have to do is abandon a nuclear weapon in meaningful and verifiable ways.”

The last round of peace talks had been expected to resume ‌on Tuesday but ⁠never took place, with Iran saying it was not yet ready to commit to attending and a U.S. delegation led by Vance never leaving Washington.

Trump unilaterally extended a two-week ceasefire on Tuesday to allow more time to reconvene the negotiators.

Oil prices remained volatile on Friday, as traders weighed potential disruption from the worst oil shock in history amid the prospect for further talks.

Brent crude futures settled at $105.33 a barrel, about 0.3% higher, while U.S. West Texas Intermediate futures were down 1% at $94.88.

HEZBOLLAH DISMISSES LEBANON CEASEFIRE EXTENSION

On Thursday, Israel and Lebanon extended a separate ceasefire for three weeks at a White House meeting brokered by Trump.

The war in Lebanon, which Israel invaded last month to root out Iran’s Hezbollah allies after the militant group fired across the border, ​has run in parallel with the wider Iran war, ​and Tehran says a ceasefire there is a precondition ⁠for talks.

There was little sign of an end to the fighting in southern Lebanon. Lebanese authorities reported two people were killed by an Israeli strike and Hezbollah downed an Israeli drone.

While the ceasefire that came into force on April 16 has led to a significant reduction in hostilities, Israel and Hezbollah have continued to trade blows in southern Lebanon, where Israel has ​kept soldiers in a self-declared “buffer zone.”

“It is essential to point out that the ceasefire is meaningless in light of Israel’s insistence on hostile acts, including assassinations, shelling, and gunfire” ​and its demolition of villages and ⁠towns in southern Lebanon, Hezbollah lawmaker Ali Fayyad said in response to the extension of the ceasefire.

Israel’s military said it had killed six armed Hezbollah members in southern Lebanon on Friday.

STRAIT OF HORMUZ BLOCKADE

Trump on Thursday said he wanted an “everlasting” agreement with Iran, while asserting the U.S. had an upper hand in the standoff in the Strait of Hormuz, the world’s most important energy shipping route.

The U.S. has yet to find a way to open the strait, where Iran has blocked nearly all ships apart from its own ⁠since the start ​of the war eight weeks ago. Iran showed off its control this week by seizing two huge cargo vessels there.

Trump imposed a separate blockade ​of Iranian shipping last week. Iran says it will not reopen the strait until Trump lifts his blockade.

Only five ships crossed the strait in the last 24 hours, shipping data showed on Friday, compared to around 130 a day before the war. Those included one Iranian oil products tanker, but none ​of the vast crude-carrying supertankers that normally feed global energy markets.

Pakistan has repaid the full $3.45 billion it owed to the United Arab Emirates, the State Bank of Pakistan said on Friday.

According to the Pakistan’s central bank, $1 billion was returned to the Abu Dhabi Fund for Development on April 23, while the remaining $2.45 billion had been repaid to the UAE earlier in the week. “This completes the repayment of total deposits of $3.45 billion to UAE,” the bank said in a statement posted on X.

The repayment comes after Pakistani officials signaled earlier this month that the country intended to settle roughly $3.5 billion in obligations to the UAE before the end of April. A senior official described the move as a deliberate decision to uphold “national dignity,” despite the anticipated strain on foreign exchange reserves.

The funds were originally extended in 2019 as part of financial support from the UAE to help Pakistan stabilize its balance of payments. However, in March, Islamabad was unable to secure a rollover of the facility—its first such setback in seven years—raising concerns about short-term financing needs.

Separately, the central bank reported that Pakistan’s foreign reserves stood at $20.63 billion as of April 17. During April, the country also received $3 billion in deposits from Saudi Arabia, including a $1 billion tranche on April 21.

Pakistan’s external position remains under pressure but is being managed as part of ongoing stabilization efforts tied to reforms supported by the International Monetary Fund. Analysts warn that risks persist, particularly due to volatile energy prices and tight global financial conditions.