Iran is poised to reject a US proposal to end a decades-old nuclear dispute, an Iranian diplomat said on Monday, dismissing it as a "non-starter" that fails to address Tehran's interests or soften Washington's stance on uranium enrichment.

"Iran is drafting a negative response to the US proposal, which could be interpreted as a rejection of the US offer," the senior diplomat, who is close to Iran's negotiating team, told Reuters.

The US proposal for a new nuclear deal was presented to Iran on Saturday by Omani Foreign Minister Sayyid Badr Albusaidi, who was on a short visit to Tehran and has been mediating talks between Tehran and Washington.

After five rounds of discussions between Iranian Foreign Minister Abbas Araqchi and President Donald Trump's Middle East envoy Steve Witkoff, several obstacles remain.

Among them are Iran's rejection of a US demand that it commit to scrapping uranium enrichment and its refusal to ship abroad its entire existing stockpile of highly enriched uranium - possible raw material for nuclear bombs.

Tehran says it wants to master nuclear technology for peaceful purposes and has long denied accusations by Western powers that it is seeking to develop nuclear weapons.

"In this proposal, the US stance on enrichment on Iranian soil remains unchanged, and there is no clear explanation regarding the lifting of sanctions," said the diplomat, who declined to be identified due to the sensitivity of the matter.

Tehran demands the immediate removal of all US-imposed curbs that impair its oil-based economy. But the US says nuclear-related sanctions should be removed in phases.

Dozens of institutions vital to Iran's economy, including its central bank and national oil company, have been blacklisted since 2018 for, according to Washington, "supporting terrorism or weapons proliferation".

Trump's revival of "maximum pressure" against Tehran since his return to the White House in January has included tightening sanctions and threatening to bomb Iran if the negotiations yield no deal.

During his first term in 2018, Trump ditched Tehran's 2015 nuclear pact with six powers and reimposed sanctions that have crippled Iran's economy. Iran responded by escalating enrichment far beyond the pact's limits.

Under the deal, Iran had until 2018 curbed its sensitive nuclear work in return for relief from US, EU and UN economic sanctions.

The diplomat said the assessment of "Iran's nuclear negotiations committee", under the supervision of Supreme Leader Ayatollah Ali Khamenei, was that the US proposal was "completely one-sided" and could not serve Tehran's interests.

Therefore, the diplomat said, Tehran considers this proposal a "non-starter" and believes it unilaterally attempts to impose a "bad deal" on Iran through excessive demands.

NUCLEAR STANDOFF RAISES MIDDLE EAST TENSIONS

The stakes are high for both sides. Trump wants to curtail Tehran's potential to produce a nuclear weapon that could trigger a regional nuclear arms race and perhaps threaten Israel. Iran's clerical establishment, for its part, wants to be rid of the devastating sanctions.

Iran says it is ready to accept some limits on enrichment, but needs watertight guarantees that Washington would not renege on a future nuclear accord.

Two Iranian officials told Reuters last week that Iran could pause uranium enrichment if the US released frozen Iranian funds and recognised Tehran's right to refine uranium for civilian use under a "political deal" that could lead to a broader nuclear accord.

Iran's arch-foe Israel sees Iran's nuclear programme as an existential threat and says it would never allow Tehran to obtain nuclear weapons.

Araqchi, in a joint news conference with his Egyptian counterpart in Cairo, said: "I do not think Israel will commit such a mistake as to attack Iran."

Tehran's regional influence has meanwhile been diminished by military setbacks suffered by its forces and those of its allies in the Shi'ite-dominated "Axis of Resistance", which include Hamas, Hezbollah, the Houthis in Yemen, and Iraqi militias.

In April, Saudi Arabia's defence minister delivered a blunt message to Iranian officials to take Trump's offer of a new deal seriously as a way to avoid the risk of war with Israel.