The talks were billed as a historic first — face-to-face negotiations between the United States and Iran, on neutral ground, after six weeks of open war. They ended Sunday morning in Islamabad with Vice President JD Vance boarding Air Force Two and flying home without an agreement. The war continues. The ceasefire is now in question. And the Strait of Hormuz remains a flashpoint that could reshape global energy markets.
Here is everything that happened, in the order it matters.
How It Started: A War and a Ceasefire That Was Always Fragile
The current conflict between the United States and Iran has its roots in a chain of diplomatic failures that stretched across 2025. After months of indirect nuclear talks — first in Oman, then Rome, then Geneva — President Trump grew impatient. By February 2026, the US and Israel launched large-scale strikes on Iran, including attacks on nuclear scientists and facilities. Iran retaliated. The Middle East went to war.
On April 7, both sides agreed to a two-week temporary ceasefire. It was a pause, not a peace. The condition was that the Strait of Hormuz — through which roughly one-fifth of the world's traded oil typically moves — would be reopened. It wasn't fully reopened. Since the ceasefire, only 12 ships had been recorded transiting the strait, compared to over 100 on an average day before the conflict.
That's the backdrop to what happened in Islamabad this weekend.
The Talks: 21 Hours, Two Hotels, One Failed Deal
The US delegation flew into Pakistan on Friday. Vance led the American side. He was joined by Trump's special envoy Steve Witkoff and Jared Kushner — the same team that handled Gaza and Ukraine negotiations. Iran's delegation was led by Parliament Speaker Mohammad Bagher Qalibaf and Foreign Minister Abbas Araghchi, with roughly 70 officials and technical experts in tow.
Pakistan served as mediator, with Prime Minister Shehbaz Sharif and Army Chief Asim Munir personally facilitating the talks. The venue was the Serena Hotel in Islamabad. Delegations reportedly stayed in separate rooms through most of the discussions, with messages being carried back and forth.
The talks began Saturday and stretched through the night and into early Sunday — 21 hours in total. By most accounts, neither side walked away. They stayed at the table. But staying at the table didn't mean they were bridging the divide.
Also Read: 21 Hours, No Deal: JD Vance Flies Home Empty-Handed as Iran Refuses to Surrender Nuclear Path
What America Wanted — and What Iran Refused
The US arrived with a 15-point proposal. At its core was one demand that the Trump administration says it will not compromise on: Iran must make an unambiguous commitment that it will never develop a nuclear weapon and will not acquire the technology to build one quickly. Secretary of State Marco Rubio had previously said the plan makes clear Iran can never have nuclear weapons. Trump himself posted on Truth Social: "There will be no enrichment of Uranium."
Iran, for its part, came with a 10-point counter-proposal. Its demands included a guaranteed end to the war, a halt to Israeli strikes on Hezbollah, the release of $6 billion in frozen assets, and crucially — continued Iranian control over transit through the Strait of Hormuz. It also insisted on its right to enrich uranium for civilian nuclear purposes.
The gap between these two positions is not a matter of wording or timing. It is a fundamental disagreement about sovereignty, nuclear rights, and who controls one of the most strategically vital waterways in the world.
Vance Speaks, Then Leaves
Just after 7 AM on Sunday, Vance appeared before reporters at a brief press conference in Islamabad.
"The bad news is that we have not reached an agreement. And I think that's bad news for Iran much more than it's bad news for the US," he said. "They have chosen not to accept our terms."
When pressed on the core issue, Vance was direct: "The simple fact is that we need to see an affirmative commitment that they will not seek a nuclear weapon, and they will not seek the tools that would enable them to quickly achieve a nuclear weapon. We haven't seen that yet. We hope that we will."
He said the US had been "quite accommodating" and that the team negotiated in "good faith." He left open the possibility that a deal could still happen, saying the US had left with a "final and best offer" on the table. "We'll see if the Iranians accept it," he said. Then he boarded the plane.
Iran's Foreign Ministry spokesperson Esmaeil Baqaei responded separately, saying the failure came from "excessive demands" by the American side and that "we should not have expected to reach an agreement in one meeting from the beginning." He confirmed that talks covered the Strait of Hormuz, nuclear issues, sanctions, reparations, and a full end to the war.
Trump Threatens a Naval Blockade
While Vance was at the press conference, President Trump was on Truth Social.
In one post, Trump said Iran's refusal to give up nuclear ambitions caused the breakdown: "There is only one thing that matters — IRAN IS UNWILLING TO GIVE UP ITS NUCLEAR AMBITIONS!"
In a second post, hours later, he escalated significantly. Trump announced that the US Navy would — "effective immediately" — prevent ships from passing through the Strait of Hormuz. He accused Iran of using the waterway for "extortion" and said Iran had better begin the process of reopening the international waterway "fast."
US Central Command confirmed that two US Navy guided-missile destroyers had already passed through the strait on Saturday, the first American warships to do so since the war began six weeks ago. CENTCOM said additional forces, including underwater drones, would join a mine-clearing effort in the coming days. The US is trying to establish what it calls a "safe passage" through the strait, effectively removing Iran's ability to block it.
This is a significant strategic development. Iran had been using control of the Strait as its main leverage in a war where it has been outgunned militarily. A US-enforced naval passage would strip Tehran of its biggest bargaining chip.
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Earlier on Saturday, Trump Said Something Else
Before the talks collapsed, Trump had told reporters: "We win, regardless" of the outcome. He claimed the US had "totally defeated that country." On the same day, Israeli Prime Minister Benjamin Netanyahu gave a televised address saying the conflict was ongoing and that Israel had "crushed" Iran's nuclear program, missile capabilities, and leadership. US intelligence assessments have reportedly raised doubts about how extensive that damage actually is.
Netanyahu did not reference the Islamabad talks directly in his address. But he did say the "battle is not yet over" — a statement that Iranian officials saw as evidence the US was aligned more closely with Israeli objectives than with a genuine peace process.
Iran's Consul General in Mumbai put it bluntly in a statement Sunday: the US was aligning with Israel's "wavelength" and stalling peace talks.
Pakistan's Role and What Comes Next
Pakistan's role as mediator has been quietly significant. Both the US and Iran named Sharif and Army Chief Asim Munir in their ceasefire announcements last week — a rare instance of both sides publicly crediting the same party. After the talks collapsed, Pakistan's Foreign Minister Ishaq Dar said Islamabad would continue its role in peace efforts and urged both sides to keep talking.
Rasheed Wali Janjua, director of research at the Islamabad Policy Research Institute, told reporters that Pakistan's standing with both parties is rare: "It's a fair assessment to say that both parties are looking for a way out."
The question is whether there is a way out. The two-week ceasefire now hangs on thin air. Iran has signalled it will continue restricting Hormuz passage. The US is now positioning naval forces to push back on that. The death toll in Iran, according to the US-based rights group HRANA, stands at over 3,400 including more than 1,600 civilians and at least 254 children.
Iran's Rial did tick up slightly after last week's ceasefire announcement. The Tehran Stock Exchange rose 2.16% at the peak of ceasefire optimism. Both of those gains are likely to reverse after Sunday's collapse.
What This Means for India
India imports a substantial share of its crude oil from the Gulf, and a significant portion of that moves through the Strait of Hormuz. A US naval blockade, combined with continued Iranian mining, creates a supply squeeze scenario. Crude had already risen to around $108 per barrel for Brent futures this past week. A prolonged standoff around the Strait would push that figure higher and directly affect India's fuel import bill, inflation projections, and the rupee.
On Sunday evening, the first oil tanker from UAE since the ceasefire was confirmed to have entered Indian waters — a small piece of good news. But with the peace process now stalled, that normalcy could be short-lived.
SOURCES
- NPR (npr.org)
- NBC News Live Blog
- CNN (cnn.com)