US and Iranian negotiators are exploring a phased deal under which Tehran would reopen the Strait of Hormuz and Washington would lift its blockade of Iranian ports, Bloomberg reported. Qatari officials are mediating, and the diplomatic push intensified on the sidelines of the UN General Assembly in New York.

Iran stuck to a seven-day proposal for reopening the strait on September 27. Foreign Minister Abbas Araghchi told NBC's Meet the Press that Iran would not soften its conditions, saying Tehran is 'ready to open the strait if certain things are done by the US', including lifting the naval blockade, unfreezing Iranian assets and ending the war 'on all fronts'.

President Donald Trump told Axios on September 27 that he had rejected Iran's latest proposal, saying Tehran had overplayed its hand. He expects more talks this week and said Iran wants the strait opened immediately 'because they're losing so badly'.

Markets reacted sharply. WTI crude futures rose about 4% to roughly $96 a barrel after the weekend rejection, and the US 10-year Treasury yield climbed to 5.23%, a high not seen since June 2007. The Strait of Hormuz remains closed as the confrontation heads into its eighth month.