By Asif Shahzad and Michael Martina
ISLAMABAD/NEW DELHI, May 23 (Reuters) - Iran, the U.S. and mediator Pakistan all said on Saturday that progress had been made in talks on ending almost three months of war.
Iran said it was focused on finalising a memorandum of understanding, or MOU, after its top officials met Asim Munir, the army chief of Pakistan.
The Pakistani army said the negotiations had resulted in "encouraging" progress towards a final understanding. Two Pakistani sources involved in negotiations said the deal being negotiated is "fairly comprehensive to terminate the war."
Sources have told Reuters the proposed framework would unfold in three stages: formally ending the war, resolving the crisis in the Strait of Hormuz and launching a 30-day window for negotiations on a broader agreement, which can be extended.
U.S. President Donald Trump said he would discuss the latest Iran draft agreement with advisers and might make a decision on Sunday on whether to resume attacks on Iran, Axios reported, citing an interview with Trump.
"Either we reach a good deal or I'll blow them to a thousand hells," Axios quoted him as saying.
One of the Pakistani sources said there was no guarantee the U.S. would accept the memorandum. If the U.S. and Iran agree, the MOU would lead to further talks after the Eid holiday ends on Friday.
TRUMP TO SPEAK WITH MIDDLE EAST LEADERS
Trump, whose ratings have been hit by the war's impact on energy prices for U.S. consumers, said on Friday he would not attend his son's wedding this weekend, citing Iran among the reasons he planned to stay in Washington.
An Arab official told Reuters that Trump would hold a phone call on Saturday with leaders from Saudi Arabia, Qatar, the UAE, Jordan, Egypt, Turkey and Pakistan.
Pakistan's mediation push aims to narrow differences between Iran and the U.S. after weeks of war that have left the vital Hormuz waterway closed to most shipping despite a nervous ceasefire, upending global energy markets.
U.S. Secretary of State Marco Rubio repeated Trump's demands: "Iran can never have a nuclear weapon. The straits need to be open without tolls. They need to turn over their enriched uranium."
Rubio, who is visiting India, said some progress had been made and work was continuing.
"Even as I speak to you now, there's some work being done. There is a chance that, whether it's later today, tomorrow, in a couple days, we may have something to say," Rubio told reporters in New Delhi.
Iran denies it is pursuing nuclear weapons and says it has a right to enrich uranium for civilian purposes. It has demanded supervision of the strait, an end to the U.S. blockade on its ports and the lifting of sanctions on Iranian oil sales.
Iranian Foreign Ministry spokesperson Esmail Baghaei said: "The trend this week has been towards a reduction in disputes, but there are still issues that need to be discussed through mediators. We will have to wait and see where the situation ends in the next three or four days."
Pakistan's army chief Munir left Tehran on Saturday after talks with Iran's top negotiator Mohammad Baqer Qalibaf and Foreign Minister Abbas Araqchi.
Baghaei said the issue of the U.S. blockade on Iran's shipping was important, but that its priority was ending the threat of new U.S. attacks and the ongoing conflict in Lebanon, where Iran-allied Hezbollah militants are fighting Israeli troops who have moved into the south.
Qalibaf said Iran would pursue its "legitimate rights," both on the battlefield and through diplomacy, but added that it could not trust "a party that has no honesty at all," an allegation Iran has made several times before.
He said Iran's armed forces had rebuilt their capabilities during the ceasefire and that, if the U.S. "foolishly restarts the war," the consequences would be "more forceful and bitter" than at the start of the conflict.
Despite weeks of conflict, Iran has preserved its stockpile of near-weapons-grade enriched uranium as well as missile, drone and proxy capabilities.
(Additional reporting by Doina Chiacu, Hatem Mater, Andrew Mills and Asif Shahzad; writing by Philippa Fletcher, Rod Nickel; editing by Kevin Liffey and David Gregorio)
