Traders in Tehran exchanged more than 2.5 million rials for one U.S. dollar on Tuesday, a record low, as Iran's government confirmed it had received a U.S. reply to its latest proposal to end the seven-month war. The rial had previously hit a record low of 2.2 million to the dollar on Sept. 2. Since the war began in late February, it has repeatedly set new lows.
Officials wouldn't say what the American response contained. They didn't say whether Washington had rejected the offer. Government spokesperson Fatemeh Mohajerani told the state-run IRNA news agency that Foreign Minister Abbas Araghchi presented the reply to President Masoud Pezeshkian at a Cabinet meeting.
"We will make every effort to bring the agreement to fruition and will firmly stand up for the rights of the Iranian people," Pezeshkian said. "The agreement must now be based on a win-win strategy."
The Economic and Human Toll
Iran's economy was under heavy strain before the war. Once fighting began, it entered a free fall. The currency's slide offers one measure of what the conflict costs ordinary Iranians.
The Strait of Hormuz adds to that strain. Before the war, around a fifth of the world's oil and liquefied natural gas passed through it. Since fighting began, Tehran has blocked commercial ships and fired on vessels it accused of unauthorized crossings, while Washington has imposed a counterblockade of Iranian ports. Shipping has increased in recent weeks, but shippers charge high fees to cover the risk of attack. Flows of crude oil, refined products and natural gas remain substantially disrupted.
The danger is real. Britain's UKMTO maritime security body reported Wednesday that unknown projectiles struck three ships in the strait the previous day, including a crude oil tanker.
Diplomacy Stuck on Sequencing
An official briefed on the talks, who isn't Iranian and spoke to Reuters on condition of anonymity, said Qatari mediators briefed Araghchi on the U.S. response Tuesday in Doha. The sides largely agree on the steps needed, the official said, but disagree on the order in which to take them.
The previous week, Araghchi said he had floated a plan to reopen the strait within a week if the United States lifted its blockade of Iranian ports, released frozen Iranian assets and waived sanctions on Iranian oil sales, among other conditions. President Donald Trump rejected it. He said Iran wanted a deal because it was "losing so badly," and called the proposal something that "would not be acceptable." Mediators from Qatar and Pakistan are still working with both governments, officials who weren't authorized to comment publicly said.
Pressure continues alongside the talks. On Tuesday, the U.S. Treasury announced sanctions against ten individuals and entities in Iran, Hong Kong and Pakistan, accusing them of procuring weapons and components for Iran's Defense Ministry. The action forms part of a campaign the administration calls "Operation Economic Outcast." Trump said Iran was "failing very badly, very badly" and predicted the war would be "over with very, very soon." At the outset, he predicted it would last only weeks. More recently, he said he expected it wouldn't end until after the Nov. 3 U.S. midterm elections.
Polls in the United States showed the war was unpopular from the start. Higher fuel prices have hurt Trump's Republicans, who are defending both houses of Congress in elections five weeks away. Iran's Islamic Revolutionary Guard Corps responded with a 26-page letter urging American voters to "remove from power the evil, deceitful, and violent politicians who are responsible for America's current state."
Rights Concerns Inside Iran
IRNA reported Wednesday that two men were executed for involvement in violence during nationwide anti-government protests. Citing the judiciary, the agency said they took part in unrest in Mashhad that left four security-force members dead. Iran's Supreme Court upheld their death sentences, and authorities carried them out Wednesday morning.
The protests began Dec. 28 amid anger over the collapsing currency and worsening economy. They spread as demonstrators increasingly called for the overthrow of the Islamic Republic. Authorities launched a deadly crackdown. Rights groups said thousands were killed and tens of thousands arrested. Iranian authorities reported a substantially lower death toll.
Israeli Warnings
In a Wednesday interview with Maariv, former national security council head Meir Ben-Shabbat warned that pressure on Iran could still push Tehran to consider a direct attack on Israel. He said the regime's condition was "serious but not critical." A U.S.-Iran agreement, he argued, would be "a lifeline for the regime in Tehran." Asked whether Israelis and Jews abroad should prepare for more attempts to target them, he said: "The system and the citizens must assume so."
Ben-Shabbat said Hezbollah had suffered a strategic blow, but the campaign against it wasn't over. He noted that Lebanese voices frustrated over the heavy cost of Hezbollah's war were growing. On Gaza, he said Israel must continue until Hamas's military and governing capabilities are "completely eliminated" and the territory is demilitarized under Israeli security control. He said the area should become "eternal testimony to the prices that anyone who thinks in the future about attacking Israel will pay."
Asked about European measures targeting goods from the West Bank, east Jerusalem and the Golan Heights, and their potential economic impact on Palestinians, he said he didn't know the precise figures. He called some international actors' focus on settlements "another expression of the double standard and hypocrisy on their part."
Why This Matters: After seven months of war, civilians far from the negotiating table are paying the price. The currency keeps hitting record lows. Ships still face strikes in shipping lanes. Inside Iran, rights groups say a domestic crackdown killed thousands.
The reported gap between the two governments concerns sequencing, not substance, yet every week without a deal adds to the toll. Ben-Shabbat's comments show how Israeli officials view the stakes of any agreement, while Gaza, Lebanon and the West Bank remain tied to the wider confrontation. Diplomats and mediators still have a narrow opening, but the political calendar in Washington adds pressure on all sides. The next U.S. midterm elections are Nov. 3.