By Steve Holland and Jacob Bogage
WASHINGTON, Aug 10 (Reuters) - U.S. President Donald Trump on Monday responded to Iran's conditions for a peace deal with his own demands that Iran pay compensation for people killed in wars, attacks and protests, in a rhetorical escalation likely to complicate efforts to reopen the Strait of Hormuz.
Trump's proposal, which had not been raised before, was a response to Tehran's demands for compensation and an end to sanctions. The Iranian demands were largely in line with the terms of a preliminary peace deal signed in June, which has since broken down.
Since the war began in February, Trump has repeatedly oscillated between threats of escalation and claims that a peace deal is imminent.
"We're going to ask for money for the damage they've done over a 50-year period," Trump said at the White House, saying payments would cover deaths among both civilian demonstrators and U.S. forces in the region.
"So if there's damages to be paid, I think Iran should pay those damages," Trump said.
Oil prices settled 5% higher on Monday after the demands dimmed prospects for a deal to reopen the strait.
TRUMP CITES ATTACK BLAMED ON AL QAEDA, NOT IRAN
Referring to Tehran's crackdown on demonstrations in late 2025 and 2026, Trump said Iran had killed some 52,000 protesters as of six weeks ago. While some Iranian opposition and exile groups have claimed tens of thousands killed, the U.S.-based Human Rights Activists News Agency (HRANA) in February reported around 7,000 deaths including 6,500 protesters.
Trump encouraged protesters to overthrow the Iranian government when the war began with U.S. and Israeli airstrikes in February. Rights groups say the Iranian government has continued to crack down on opponents since then.
Trump also said Iran should compensate families of the 17 U.S. sailors killed in an October 2000 attack in Yemen on the naval vessel USS Cole, which has been blamed on al Qaeda, not Iran.
"Also, with respect to the Iran negotiations, Iran should be responsible for the damages and death caused to the people of Lebanon, Syria, Yemen, and Gaza!" Trump wrote in a Truth Social post.
Iran earlier said it was nearing a final pact with Oman defining new shipping lanes between them through the Strait of Hormuz but repeated that the U.S. must meet conditions, including compensation and an end to sanctions and military threats before the key waterway is reopened.
The strait, through which about a fifth of global oil and liquefied natural gas flowed prior to the conflict, has been effectively blocked since the war began, pushing up oil prices and inflation.
TRUMP UNDER PRESSURE
Ironically, the agreement with Oman would give Tehran more leverage over the key waterway than it had before the war began.
Trump is under pressure to end a war that is deeply unpopular at home ahead of midterm elections in November, and high fuel prices are a top issue in rural areas that have backed him in the past.
"What you're seeing here is the beginning of a capitulation," Democratic U.S. Representative Bill Keating said on CNN. "This is reality. It's sinking in."
Earlier on Monday, Iranian Foreign Ministry spokesman Esmaeil Baghaei said talks with Oman were "progressing smoothly and constructively", with an agreement reached on a shipping route map, while some technical issues remained unresolved.
Baghaei said the discussions also covered services which would normally involve payment, such as safe navigation, environmental protection, maritime services and combating crime.
U.S. officials have repeatedly ruled out any deal that would allow Tehran to charge fees for access to the strait.
But months of U.S. military efforts, including a two-week campaign of strikes in July, have not broken Iran's grip on the strait, despite Trump's misleading claim, repeated on Monday, that the strait was open and, "The only one that has control of the Strait of Hormuz right now is the United States Navy."
Washington and Tehran agreed to a ceasefire in June, but the U.S. reimposed a blockade on Iranian shipping in July, a move that Tehran said violated the truce.
Iran has been striking back with missiles and drones against Washington's allies in the region, while also targeting commercial ships transiting the strait without its permission.
(Reporting by Steve Holland and Jacob Bogage in Washington, Nayera Abdallah in Dubai, Enas Alashray in Cairo and Stephanie Kelly in London; Writing by Daniel Trotta, Idrees Ali, Sharon Singleton and Andrew Heavens; Editing by Andy Sullivan, Nick Zieminski, Alison Williams, Mark Potter and Cynthia Osterman)
