By Gram Slattery, Maayan Lubell and Alexander Cornwell
WASHINGTON/JERUSALEM/TEL AVIV, March 23 (Reuters) - Iran denied on Monday that it had engaged in negotiations with the United States, after President Donald Trump postponed a threat to bomb Iran's power grid because of what he described as productive talks with unidentified Iranian officials.
Trump wrote early in the U.S. morning on his Truth Social platform that the U.S. and Iran had held "very good and productive" conversations about a "complete and total resolution of hostilities in the Middle East".
As a result, he said, he was postponing a plan to hit Iran's energy grid for five days. His announcement sent share prices sharply higher and oil prices sharply lower, a sudden reversal to a market swoon caused by his weekend threats and Iran's vows to respond.
He later told reporters that his special envoy Steve Witkoff and son-in-law Jared Kushner, who had been negotiating with Iran before the war, had held discussions with a top Iranian official into the evening on Sunday, and would continue on Monday.
"We have had very, very strong talks. We'll see where they lead. We have major points of agreement, I would say, almost all points of agreement," he told reporters before departing Florida for Memphis.
In Memphis he said Washington had been negotiating with Iran "for a long time, and this time they mean business," adding: "I think it could very well end up being a good deal for everybody."
He did not identify the Iranian official in touch with Witkoff and Kushner, but said: "We're dealing with the man who I believe is the most respected and the leader."
"We're dealing with some people that I find to be very reasonable, very solid. The people within know who they are. They're very respected, and maybe one of them will be exactly what we're looking for."
'FAKENEWS', SAYS IRAN PARLIAMENT SPEAKER
Iran's powerful parliament speaker Mohammad Baqer Qalibaf said on X that there had been no such talks with the United States, and ridiculed the suggestion as an attempt to rig financial markets.
"No negotiations have been held with the U.S., and fakenews is used to manipulate the financial and oil markets and escape the quagmire in which the US and Israel are trapped," he wrote.
"Iranian people demand complete and remorseful punishment of the aggressors. All Iranian officials stand firmly behind their supreme leader and people until this goal is achieved."
Iran's elite Revolutionary Guards said they were launching fresh attacks on U.S. targets, and described Trump's words as "psychological operations" that were "worn out".
"The contradictory behavior of the U.S. president does not cause us any negligence on the war front or the continuation of the battle with the hostile enemy," the Guards said in a statement.
Although there was no immediate confirmation that talks had already taken place as described by Trump, there were indications of outreach, with third countries acting as potential mediators or helping to set up contacts. Iran's foreign ministry described initiatives to reduce tensions, without giving further details.
A Pakistani official and a second source said talks on ending the war could be held in Pakistan as soon as this week.
The Pakistani official said U.S. Vice President JD Vance, as well as Witkoff and Kushner, were expected to meet Iranian officials in Islamabad. A second Pakistani official said Islamabad was relaying messages between the United States and Iran.
An Israeli official and two other sources familiar with the matter said the interlocutor on the Iranian side was Qalibaf, the parliament speaker, who has become increasingly influential.
A European official said there had been no direct negotiations between the U.S. and Iran but Egypt, Pakistan and Gulf states were relaying messages.
MARKET RESPITE
Trump's announcement that he was holding off on his plan to hit Iran's grid abruptly reversed a plunge in global markets, which had shuddered on Monday in Asia and Europe and had been on course to open sharply lower in the United States following the weekend threats.
Iran had responded to Trump's threats by saying it would hammer the infrastructure of U.S. allies in the Middle East, raising the prospect that an extreme disruption to global energy supplies could last longer than previously expected.
The respite sent the Brent crude oil benchmark tumbling around 8% to about $103 a barrel. [O/R]
Iran has effectively closed the key Strait of Hormuz, through which about a fifth of global oil and liquefied natural gas flows. Trump has demanded Iran open the strait, but Tehran says it will not do so until the United States and Israel call off their attacks.
One of the sources, briefed on Israel's war plans, said Washington had kept Israel informed of its contacts with Tehran, and that it was likely to follow Washington in suspending any targeting of Iranian power plants and energy infrastructure.
Israeli Prime Minister Benjamin Netanyahu's office did not respond to a request for comment on talks or on Washington's decision to suspend strikes on some targets.
More than 2,000 people have been killed in the war the U.S. and Israel launched on February 28.
(Reporting by Phil Stewart, Idrees Ali and Gram Slattery in Washington, Maayan Lubell in Jerusalem and Alexander Cornwell in Tel Aviv, Ariba Shahid in Karachi and Saad Sayeed in Bangkok; Additional reporting by Reuters bureaus; Writing by Michael Perry, Sharon Singleton, Peter Graff; Editing by Kevin Liffey, Aidan Lewis)
