Trump began Iran talks as allies warned war risked disaster

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WASHINGTON – US President Donald Trump’s decision to back down from his threat to destroy Iran’s power infrastructure came after US allies and Gulf countries privately warned him of the dangers of following through with his threat, according to people familiar with the matter.

Mr Trump said on March 23 that he was giving Iran a five-day reprieve from his threatened action, pointing to new talks with Tehran he believed could broker a deal that would resolve the conflict.

But his decision came after some allies cautioned that the war was quickly becoming a disaster. Regional partners told the US that permanent damage to Iranian infrastructure would almost inevitably result in a failed state after the conflict ended, according to the people, who described private conversations held on the condition of anonymity.

Pulling back also dovetailed with another of Mr Trump’s interests: calming markets rattled by his threats and the ongoing conflict.

His decision, announced shortly before US trading began, was designed in part to address those concerns, according to the people, and immediately spurred a sharp fall in Brent crude and a rebound in the S&P 500 and US Treasuries.

“Trump needed some way to climb down from a threat that would surely have started a new round of escalation, this time crossing a new threshold by targeting civilian energy infrastructure, which would likely constitute a war crime,” said Ms Dana Stroul, former deputy assistant secretary of defence for the Middle East.

“It is surely no coincidence that the announcement of a five-day pause and talks came right before markets opened in the United States on Monday morning.”

The picture that has emerged is one in which Iran’s regional neighbours are, for now, seeing the latest burst of diplomacy as a five-day reprieve.

One senior diplomat said Egypt, Turkey and Pakistan were passing messages between the US and Iran. While officials are acting as go-betweens for the two countries, it is not at all clear to what extent those negotiations are happening directly.

Mr Trump, speaking on March 23 while travelling to Tennessee, said representatives from Iran had reached out to start the talks because they were eager to make a deal after his threat to strike energy facilities. 

“We’ve been negotiating for a long time, and this time, they mean business, and it’s only because of the great job that our military did,” the US leader said.

The negotiations between an unnamed Iranian official, his son-in-law Jared Kushner and adviser Steve Witkoff started on March 21 and continued on March 22, Mr Trump said. According to the US President, Tehran agreed to turn over nuclear material in the country and not resume its nuclear programme.

The talks were expected to continue by phone on March 23. When asked who would control the pivotal Strait of Hormuz under such a deal, Mr Trump said: “Maybe me and the ayatollah – whoever the ayatollah is.”

He added: “We’ll see how that goes, and if it goes well, we’re going to end up with settling this.

“Otherwise, we’ll just keep bombing our little hearts out.”

Other nations also acknowledged conversations with the US after Mr Trump issued his threat. British Prime Minister Keir Starmer said his government was aware of the talks with Iran.

“I welcome the talks reported between the US and Iran, and to be clear with the committee, we, the UK, were aware that that was happening,” Mr Starmer said on March 23.

Pakistan’s army chief Asim Munir spoke to Mr Trump on March 22, while Pakistani Prime Minister Shehbaz Sharif held talks with Iranian President Masoud Pezeshkian on March 23, the Financial Times reported.

Still, Iran’s Foreign Ministry denied any US-Iran talks to the state-run Mizan News Agency. On March 23, Iran’s Parliament Speaker Mohammad Bagher Ghalibaf said in a social media post that Mr Trump’s claims were fake news “used to manipulate the financial and oil markets”.

The US President’s decision to halt his planned strikes on energy facilities was specifically seen as an effort to manage oil prices by people familiar with the proceeding diplomatic talks, and on March 23, Mr Trump acknowledged the link.

“The price of oil will drop like a rock as soon as the deal is done,” he said. “I guess it already is today. So we have a very serious chance of making a deal.”

That mixing of motives has fanned questions across Washington and Wall Street about the actual prospects for peace.

Mr Trump’s well-established history of backing off maximalist threats, Iran’s own record of stringing along nuclear talks, and recent examples of the US using discussions with Tehran as a feint ahead of fresh military action have diplomats and traders questioning whether the negotiations are likely to yield a real deal.

“The President also has shown a penchant for misdirection, and we cannot rule out the possibility that his 48-hour deadline might provide cover for some near-term event that could change the facts on the ground,” ClearView Energy Partners said in an analyst note.

Also concerning was Iran’s immediate bid to deny that any such talks took place, while claiming victory.

“He retreated after hearing that our targets would be all power plants in West Asia,” Iran’s semi-official Fars news agency reported, citing an anonymous Iranian source. Crude pared about half its initial losses after the Fars report, with some traders sceptical about the accuracy of Mr Trump’s statement.

The US leader’s emphatic insistence that there are direct communications was met with caution by many US allies who adopted a wait-and-see approach and remained sceptical of this latest salvo, given his multiple reversals during the three-week conflict. 

Mr Trump conceded that the talks had not been with Ayatollah Mojtaba Khamenei, who was appointed supreme leader after his father Ali Khamenei was killed in the strikes.

Mr Trump said the US had not heard from the new leader directly – and was not sure if he was still alive – but believed, based on intelligence, that Mr Witkoff and Mr Kushner were dealing with the true power centre in Iran.

Still, there is a risk that the pause could end up validating Iran’s approach, particularly if the talks do not succeed.

“This risks confirming, in Tehran’s mind, that if it threatens back, especially against energy infrastructure in the region, it can compel the US to back down,” said Mr Jonathan Panikoff, former deputy national intelligence officer for the Near East at the US National Intelligence Council.

“In its mind, Iran is not only winning, but this is the type of action that increases its own deterrence.”

At the same time, Mr Trump has not said whether he would hold back on strikes on military sites in the country during the five-day reprieve.

Israel is not seeing an imminent end to the war and plans to continue operations while avoiding energy assets, according to an Israeli official, who asked not to be identified discussing private matters. 

Israel was told about Mr Trump’s social media post ahead of time, two officials said, and its army said it was striking the heart of Iran’s capital, Tehran, within an hour of the announcement. So it is not clear that the decision is the beginning of a process to end the war.

An Israeli military spokesperson said the war is not on pause, and fighting is ongoing.

Mr Trump, for his part, acknowledged speaking to the Israelis about the negotiations but predicted they would be on board with an eventual deal.

“I think Israel will be very happy with what we have,” he said. “We just spoke to Israel a little while ago. I think they’ll be very happy. This will be peace for Israel – long-term peace, guaranteed peace, if this happens.”

Various Middle Eastern countries, including Turkey, Saudi Arabia and Oman, have been involved in backchannel talks with Iran in the past two weeks to try to contain the war and, ideally, get the Islamic republic and the US-Israeli coalition to agree to a truce.

“It’s great for the other Middle Eastern countries, Saudi Arabia, the United Arab Emirates (UAE), Qatar, all of them, Kuwait and Bahrain in particular,” Mr Trump said of his efforts.

In the days leading up to the US leader’s announcement, the most active backchannels to Iran were those convened by Turkey and Oman, according to a senior diplomat posted in the region, while messages were also travelling through Riyadh, New Delhi and Cairo, according to another.

But it is not clear what impact those discussions had on Mr Trump’s decision.

At the same time, officials from multiple Gulf countries, which have been at pains to stay out of the war, have hardened their stances against Iran following weeks of bombardment from Tehran.

Saudi Arabia told the US that it was ready to strike Iran if its own power and water plants were targeted by the Islamic republic, according to people with knowledge of the matter.

The UAE has been among the most vocal, with multiple officials saying it will defend itself against Iranian aggression and a top adviser to the Emirati President saying Iran had driven them closer to Israel and the US.

Mr Trump’s decision illustrated the scattered approach he has taken to the war.

It came after three days in which he sent thousands of marines to the region and talked about potential ground operations, floated the idea that the war was “winding down”, suggested he would leave it to others to reopen the strait and then issued the 48-hour ultimatum. BLOOMBERG