Iran Says Peace Talks Stalled Over $24 Billion Demand, Warns Conflict Could Escalate

Efforts to secure a broader peace agreement between Iran and the United States have reached a critical impasse, with a senior adviser to Iran’s supreme leader warning that negotiations are deadlocked over Tehran’s demand for the release of $24 billion in frozen assets and cautioning that failure to reach an agreement could lead to a wider regional conflict.

According to officials familiar with the discussions, Iran has made the unfreezing of billions of dollars in overseas assets a key condition for any meaningful breakthrough in talks aimed at ending months of conflict and easing tensions across the Middle East. Tehran is also seeking broader sanctions relief and guarantees against future military action.

The warning comes as indirect negotiations between Washington and Tehran continue to struggle over several unresolved issues, including Iran’s nuclear programme, the future of sanctions, security guarantees, and the reopening of shipping routes through the strategic Strait of Hormuz. While U.S. officials have expressed optimism that a deal remains possible, Iranian officials say progress has been slow and insufficient.

Iranian officials have repeatedly stressed that economic relief is essential to any settlement. The latest dispute centers on Tehran’s demand for access to $24 billion in frozen funds, which Iranian negotiators argue is necessary to stabilize the country’s economy and demonstrate goodwill from the West.

The adviser warned that continued stalemate could fuel further instability across the region, where fighting involving Iran, Israel, Hezbollah and other armed groups has already disrupted shipping, driven up oil prices and displaced large numbers of civilians. He cautioned that the conflict could expand if diplomatic efforts collapse entirely.

Despite the deadlock, diplomatic channels remain open. Recent mediation efforts involving regional and international actors have sought to bridge differences, but major obstacles remain, particularly regarding Iran’s nuclear activities and the terms of sanctions relief.

Analysts say the coming days could prove decisive, as both sides weigh the costs of compromise against the risks of renewed escalation in an already volatile Middle East.