Another insider said accepting the proposal could appear to deny Trump a victory in the two-month war, according to the New York Times.
Trump’s expected rejection has once again dampened hopes for a resolution to the conflict that has triggered global economic upheaval, sent oil and gas prices soaring and fuelled inflation.
Today, Trump remained optimistic. He claimed that Tehran had informed Washington that it was in a “state of collapse” and wanted to reopen the crucial waterway “as soon as possible”.
There have been no such public statements made by Iranian officials, who have repeatedly framed the US and Israeli campaign as a significant failure.
Iran’s nuclear ambitions remain a significant impasse in peace negotiations.
Trump, who is currently hosting the King and Queen in Washington, insisted on Monday that a commitment to non-nuclear proliferation was a red line.
“They know what has to be in the agreement. It’s very simple: They cannot have a nuclear weapon; otherwise, there’s no reason to meet,” he said.
Trump is under increasing pressure to end the costly war that started on February 28 and has seen his approval ratings plunge.
Yet, with the warring sides still seemingly far apart, oil prices rose again, extending gains in early Asian trading.
Several advisers told Axios that Trump was vacillating between launching new military strikes or waiting to see if his “maximum pressure” financial sanctions would make Iran more inclined to negotiate.
Speaking about the frozen nature of the conflict, Trump told one adviser: “All [Iran’s leaders] understand is bombs”.
However, the messaging from the Islamic Republic through negotiations has been one of defiance and a strong reluctance to shift from its maximalist positions.
Reza Talaei-Nik, a spokesman for Iran’s Defence Ministry, said that Washington should “accept that it must abandon its illegal and irrational demands” in the negotiations.
He told Iranian state television: “The United States is no longer in a position to dictate its policy to independent nations”.
Iranian officials had said the proposal carried by Abbas Araghchi, the Iranian Foreign Minister, to mediators in Pakistan over the weekend had envisioned talks in stages, with the nuclear issue to be set aside at the start.
Iran is seeking an end to US-Israeli attacks on Iran, and wants security guarantees to protect its sovereignty before negotiators resolve the US blockade of Iran’s trade by sea and the fate of the strait, over which Tehran hopes to maintain control.
Only then would talks address other issues, with Iran still seeking some kind of US acknowledgment of its right to enrich uranium.
The fragile ceasefire in the region has also been threatened by Israel’s fresh strikes against Hezbollah targets in Lebanon, as both sides trade blame for violations of the US-brokered truce.
Israel’s military told residents of more than a dozen villages and towns in southern Lebanon to evacuate immediately and head north, saying it would respond to Hezbollah’s “violation” of the truce there.
Israel has seized large swathes of heavily bombed southern Lebanon to create a so-called “buffer zone”.
Shortly after a ceasefire with Hezbollah came into effect on April 17, Israel announced a so-called “yellow line” – a strip of Lebanese territory around 10km deep along its border with Israel.
Gideon Saar, Israel’s Foreign Minister, saidthat it had “no territorial ambitions” in the country, insisting its troop presence only “serves one purpose: protecting our citizens”.
Sign up to Herald Premium Editor’s Picks, delivered straight to your inbox every Friday. Editor-in-Chief Murray Kirkness picks the week’s best features, interviews and investigations. Sign up for Herald Premium here.