President Donald Trump says he is not satisfied with the latest Iranian proposal for talks on the Iran war, while Iran's foreign minister said Tehran was ready for diplomacy if the United States changes its approach.
He added that the US would not exit its confrontation with Iran early "and then have the problem arise in three more years".
Trump's comments indicated the deadlock over the two-month-old war is likely to persist, even as he looks to end a conflict that remains deeply unpopular among Americans.
Though the US and Iran have suspended hostilities since an April 8 ceasefire, the two countries remain at odds over a range of issues, including Iran's nuclear ambitions and control over the Strait of Hormuz, and the two sides have yet to agree to a second meeting, following a brief summit of senior officials in Islamabad last month.
It was unclear what the Iranians had submitted in their fresh proposal. Iran's Foreign Ministry has cautioned against expecting quick results.
"They want to make a deal, but ... I'm not satisfied with it," Trump told reporters at the White House, adding that the Iranian leadership was "very disjointed" and split into two or three groups.
"They're asking for things that I can't agree to," he said, adding that negotiations by phone were continuing.
Trump has repeatedly said Iran would not be allowed to have a nuclear weapon. He is also under pressure to break Iran's hold on the strait, which has choked off 20 per cent of the world's oil and gas supplies.
Global oil prices, which remain well above $US100 a barrel, had eased following news of the Iranian proposal. By Friday afternoon, Brent crude was at $US110, down two per cent.
Iran's Foreign Minister Abbas Araqchi said his country was ready to pursue diplomacy if the United States changes what he called its "excessive approach, threatening rhetoric and provocative actions."
However, Araqchi added in a post on his Telegram channel that "Iran's armed forces remained ready to defend the country against any threat."
Separately, Trump told leaders in Congress that he did not need their permission to extend the war beyond a Friday deadline set by law because the ceasefire had "terminated" hostilities.
"Do we want to go and just blast the hell out of them and finish them forever? Or do we want to try and make a deal?" Trump said when asked about his options.
He added that "on a human basis," he did not prefer the military course of action.
The war, which began with US and Israeli strikes on Iran on February 28, has led to the deaths of thousands of people. The closure of the strait has increased concerns about the possibility of a wider global economic downturn.
The US Navy is blockading exports of Iranian crude oil. As of Friday afternoon, 45 commercial vessels had been stopped, according to the US military. The US Treasury warned that any shipper paying tolls to Iran for passage, including charitable donations to organisations such as the Iranian Red Crescent Society, would be at risk of punitive sanctions.
Iran has activated air defences and plans a wide response if attacked, having assessed that there will be a short, intensive US strike, possibly followed by an Israeli attack, two senior Iranian sources told Reuters on condition of anonymity.
The conflict has aggravated Iran's economic plight, but it looks able to survive a standoff for now, despite the US blockade that has curtailed its energy exports.
In a written message, Iran's Supreme Leader Mojtaba Khamenei called on businesses damaged in the war to avoid layoffs as much as possible, Iranian news agencies reported.
