US President Donald Trump is dissatisfied with Iran's proposal to reopen the Strait of Hormuz and end the US-Israeli war on Iran, according to a report published on Monday.

Trump was briefed on Tehran's plan, which also involves the US ending its blockade on the critical waterway, during a White House Situation Room meeting on Monday, The New York Times reported, citing anonymous sources briefed on the discussion.

The proposal does not touch on what to do with Iran's nuclear program, multiple US and Iranian officials told the Times. Iran has previously rejected US demands that it halt all uranium enrichment, maintaining it has a right under international law to do so, and has so far refused to hand over uranium it has already enriched.

It is unclear what exactly Trump has been dissatisfied with, but he has long insisted on both of the nuclear demands. An anonymous US official said accepting it would publicly deny Trump a victory.

“The United States will not negotiate through the press — we have been clear about our red lines and the president will only make a deal that’s good for the American people and the world,” White House spokesperson Olivia Wales told the Times.

Axios first reported on the proposal on Sunday, shortly after it said Iranian Foreign Minister Abbas Araghchi handed the proposal to Pakistani mediators.

Under the proposal, a ceasefire would be extended for a long period or made permanent, while nuclear talks would begin only after the strait is reopened and restrictions are lifted, according to Axios.

Trump last week rejected another proposal from Iran, and abruptly canceled negotiations in Pakistan that were to have been held in Islamabad over the weekend. US officials told The New York Times that Iran did not authorize negotiators to make any concessions related to its nuclear program, dealing a major blow to the peace talks.

The debate in the Trump administration now revolves around how much economic pain Iran can withstand amid the ongoing US blockade of the Strait of Hormuz, and the ripple effects it has on the Iranian economy.

Oil production is rapidly outstripping storage capacity, and wells cannot be turned off. Significant damage would result if they are shut down, and some figures within the administration argue that Iran would make a deal rather than incur the costs, the Times reported.

Others, however, believe Iran's leadership has only hardened following Trump's decision to join Israel in attacking the country. (AA)

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