US President Donald Trump said on Wednesday he believed a deal with Iran was “very possible,” but threatened to resume bombing if negotiations collapsed.

His comments came as Iran said a new US proposal was still under review, with its chief negotiator warning that Washington was seeking to force the Islamic republic’s “surrender.”

Trump paused a military operation to reopen the Strait of Hormuz, citing hopes for an agreement.

What did Trump say about an Iran deal this week?

Trump said a deal with Iran is “very possible” after reporting “very good talks” in the past 24 hours. He warned that if Iran rejected the terms, bombing would resume “at a much higher level and intensity.”

He also said that if Iran agreed to the terms already discussed, the war would be over.

What is Iran’s position on the US proposal?

Iran has yet to formally respond to the new US offer. Iranian foreign ministry spokesman Esmaeil Baqaei told local media the proposal was “still under review,” and that Tehran would communicate its position to mediator Pakistan after finalizing its views.

Parliament speaker Mohammad Bagher Ghalibaf warned that Washington was using a naval blockade, economic pressure and media manipulation to force Iran’s surrender.

Why did Trump pause the Strait of Hormuz operation?

Trump cited progress toward a deal when he announced that the US effort to guide ships through the vital strait would be paused “for a short period of time” to allow negotiations to conclude.

The day before, he had said the blockade would remain in place while Iran maintained its own chokehold on the waterway. The pause was widely read as a concession to keep talks alive.

The US military confirmed on Wednesday that one of its warplanes fired on and disabled the rudder of an oil tanker that attempted to break Washington’s blockade of Iranian ports.

Pakistani Prime Minister Shehbaz Sharif, a key figure in the initial Islamabad talks last month, expressed hope that “the current momentum will lead to a lasting agreement.” US outlet Axios, citing two officials, reported that both sides were close to agreeing on a one-page memorandum of understanding to end the war and set a framework for nuclear negotiations.

What role are China and Pakistan playing in Iran talks?

Iran’s top diplomat Abbas Araghchi met Chinese Foreign Minister Wang Yi in Beijing on Wednesday, saying the pair reviewed the ongoing negotiations. Araghchi added that Iran looked forward to Beijing supporting a new post-war regional framework balancing development and security. Pakistan’s Prime Minister Sharif has served as a key mediator since the initial talks in Islamabad.

How did markets react to Trump’s Iran deal signals?

Investors welcomed Trump’s more conciliatory tone and the decision to pause the Hormuz operation. The S&P 500 and Nasdaq both closed at record highs on renewed hopes of a breakthrough. Trump’s shift in tone came hours after Secretary of State Marco Rubio said the US had completed its offensive operations against Iran.

Despite the diplomatic momentum, opinions inside Iran remained divided. One Tehran resident told AFP journalists that any deal with the current government was “terrifying.” Translator Azadeh, 43, said: “We’ve gone through so much hardship and suffering, and no achievements for people? I honestly just hope they finish this regime.”

What is happening on the Lebanon front of the war?

Israel struck Beirut’s southern suburbs on Wednesday in the first attack on the area in nearly a month, killing a senior Hezbollah commander from the group’s elite force. At least 11 other people were killed in strikes across Lebanon’s south and east, according to the Lebanese health ministry. Israel’s army chief Lieutenant General Eyal Zamir visited troops in southern Lebanon and vowed to “seize every opportunity to deepen the dismantling of Hezbollah.”

Washington and Gulf countries have drafted a UN Security Council resolution demanding Tehran halt attacks, disclose mine locations, and end efforts to toll shipping. Secretary of State Rubio said a vote was expected in the coming days. Its adoption remains uncertain.