• The White House has rejected Iran's 14-point peace proposal, with President Trump calling it "totally unacceptable."
  • A high-level Situation Room meeting is scheduled for Tuesday to determine the U.S. response and possible escalation.
  • Oil prices surged on the rejection, reflecting market anxiety over potential supply disruptions in the Strait of Hormuz.

The United States has dismissed Iran's latest diplomatic overture, a 14-point peace proposal that included ending hostilities, reopening shipping lanes, and easing pressure on Iranian ports, along with broader concessions such as sanctions relief and a U.S. troop withdrawal near Iran's borders. President Trump labeled the offer "totally unacceptable," according to a person familiar with the matter. The rejection sets the stage for a crucial Situation Room meeting on Tuesday, where senior officials will weigh next steps amid heightened tensions.

The proposal, submitted through intermediaries including Oman and Pakistan, marked Tehran's most comprehensive attempt to de-escalate the crisis since the conflict intensified. However, U.S. officials viewed the demands as excessive, particularly the call for sanctions relief and a reduction in American military posture. "This isn't a serious offer," a White House official said, speaking on condition of anonymity. "It's a laundry list of their maximalist goals."

The economic fallout has been immediate. Benchmark crude prices jumped more than 2% on Monday following news of the rejection, as traders priced in the risk of sustained disruption to the Strait of Hormuz, a chokepoint for about 20% of global oil shipments. Shipping costs have also risen, and equity markets in energy-sensitive sectors have turned volatile. For households, the primary channel of impact will be higher fuel prices, analysts say.

Tuesday's Situation Room meeting is expected to focus on whether to tighten economic penalties, increase naval presence in the Gulf, or pursue a revised negotiation framework. The administration has been under pressure from hawks who argue that Iran is only negotiating under duress from sanctions and military pressure, while critics warn that a continued hardline stance could prolong instability. The White House declined to comment on specific options ahead of the meeting.

Iranian state media has framed the proposal as a goodwill gesture aimed at ending hostilities, while U.S. coverage has emphasized its one-sided nature. The standoff is the latest episode in a cycle of temporary de-escalation efforts followed by renewed brinkmanship, with nuclear concerns, maritime security, and regional military posture all in play.

Efforts to reach the Iranian mission to the United Nations for comment were unsuccessful.

Correction: An earlier version of this article misstated the number of points in Iran's proposal as 12. It is 14.