Iran Rejects US Peace Plan, Issues Counterproposal: March 26 Update

Iran Rejects US 15-Point Peace Plan as War Enters Day 27

On March 26, 2026, the US-Israel war on Iran entered its 27th day with no ceasefire in sight after Tehran publicly rejected Washington’s 15-point peace proposal, calling it “extremely maximalist and unreasonable.” The conflict, which began on February 28 when the United States and Israel launched surprise airstrikes across Iran, continues to escalate across the Middle East, with explosions reported in Iran, Israel, Lebanon, and several Gulf states.

The rejection came as the death toll surpassed 1,750 in Iran alone, according to Iran’s deputy permanent representative to the International Maritime Organization. The UN Secretary-General warned that the conflict is now “totally out of control,” urging all parties to pursue diplomacy. Meanwhile, US Central Command confirmed that more than 50,000 American troops are now deployed across the Middle East, including two aircraft carrier strike groups.

Enghelab Square in central Tehran on March 25, 2026 showing the impact of the ongoing US-Israel war on Iran
Enghelab Square in central Tehran, March 25, 2026. (Photo: AFP via Al Jazeera)

What Did Trump’s 15-Point Peace Proposal Demand?

The peace plan, delivered through intermediaries and made public on March 24, outlined sweeping demands that Tehran viewed as tantamount to capitulation. Under the proposal, Iran would be required to commit never to pursue nuclear weapons, dismantle its three main nuclear facilities, and surrender all enriched uranium to the International Atomic Energy Agency (IAEA).

Additionally, Tehran would need to suspend ballistic missile production, limit its remaining missile program, reopen the Strait of Hormuz to commercial shipping, and cease all funding to regional proxy groups, including Hezbollah, Hamas, and the Houthis. The White House described the plan as a “comprehensive framework for lasting peace,” but Iranian officials saw it as a non-starter.

A high-ranking Iranian diplomatic source told Al Jazeera that the proposal “ignores the fundamental reality that Iran is defending itself against an unprovoked military assault.” Iran’s Foreign Ministry confirmed receiving the document but stated the terms were unacceptable in their current form.

Iran Issues Counterproposal with Five Conditions

Rather than simply rejecting the US plan, Tehran responded on March 25 with its own set of five conditions to end hostilities. Iran’s counterproposal demands that the United States and Israel pay reparations for war damages inflicted since February 28. Tehran also insists on international recognition of Iran’s sovereignty over the Strait of Hormuz and a complete lifting of all international sanctions.

The Iranian government further called for a wider Middle East ceasefire that would protect its allied groups across the region, and demanded guarantees against future military aggression. According to reporting by Foreign Policy, the counterproposal was viewed in Washington as equally unrealistic, setting the stage for a prolonged diplomatic stalemate.

Despite the public posturing, there are signs of behind-the-scenes movement. The New York Times reported that Iranian officials are privately considering meeting with US negotiators in Islamabad, Pakistan. The White House press secretary maintained that negotiations remain “productive,” even as Tehran publicly denied any direct contact with Washington.

Aftermath of US-Israel airstrikes on Iranian cities showing destruction and recovery efforts
Aftermath of US-Israel airstrikes in Iran, March 23, 2026. (Photo: Reuters via Al Jazeera)

Israeli Military Seeks More Time to Complete Operations

According to NPR, the Israeli military estimates it would need several more weeks of fighting to complete its war goals in Iran. Israel is preparing to approve a major increase in its reserve mobilization capacity, raising the limit from 280,000 to 400,000 soldiers. This signals that Israeli military leadership views the campaign as far from over.

While Israel’s military claimed this week that it has destroyed or disabled the majority of Iran’s ballistic missile launchers, Tehran has continued to launch missiles at Israeli territory. The Washington Post reported that an Iranian missile successfully evaded US and Israeli air defense systems and struck a residential neighborhood in Tel Aviv, raising serious doubts about the effectiveness of missile interceptors.

The ongoing exchange of strikes has taken a heavy toll. At least 18 people have been killed in Israel since the conflict began, while 13 US service members have lost their lives. In Lebanon, where Israeli operations escalated on March 2, the Health Ministry reports at least 1,094 deaths, including 121 children, with 2,966 wounded.

Strait of Hormuz Crisis Roils Global Energy Markets

One of the most consequential dimensions of the conflict has been the disruption to the Strait of Hormuz, through which approximately 20% of the world’s oil supply transits. Iran’s Islamic Revolutionary Guard Corps (IRGC) declared that “not a litre of oil” would pass through the strait, and subsequent attacks on vessels caused tanker traffic to plummet by roughly 70%.

Brent crude oil prices surpassed $100 per barrel on March 8 for the first time in four years, eventually peaking at $126 per barrel. As of this week, prices remain above $110. The Dallas Federal Reserve described the disruption as the largest to the global energy supply since the 1970s oil crisis. Combined oil production from Kuwait, Iraq, Saudi Arabia, and the UAE dropped by at least 10 million barrels per day by mid-March.

On March 19, the US Armed Forces launched a military operation to reopen the strait, but progress has been limited. Saudi Arabia’s air defenses have been active, shooting down at least 32 drones and a ballistic missile in the eastern region over an 11-hour period on March 25 alone.

Israeli air strikes hit Tehran as US-Israel war on Iran continues into March 2026
Israeli air strikes hit Tehran, March 22, 2026. (Photo: AA via Al Jazeera)

What to Watch Next

The coming days will be critical on multiple fronts. The potential meeting in Islamabad between US and Iranian negotiators, if it materializes, would represent the first direct contact since the war began. Pakistan has offered to serve as a neutral venue, and both the UN and several European nations have expressed willingness to mediate.

On the military front, Israel’s push to expand reserve mobilization suggests a longer campaign ahead. The effectiveness of the US operation to reopen the Strait of Hormuz will be closely watched, as sustained oil disruptions could trigger a global recession. Economists at Goldman Sachs have warned that continued closure could push oil prices toward $150 per barrel.

The humanitarian toll also demands attention. With casualties mounting across Iran, Israel, Lebanon, and the Gulf states, pressure from international organizations and allied nations for a ceasefire is intensifying. The UN Security Council is expected to hold another emergency session this week to discuss the escalating crisis.

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