The war, which erupted more than two months ago with US-Israeli strikes on Iran, has spread throughout the Middle East and roiled the global economy despite the ceasefire, impacting hundreds of millions worldwide.

Both sides have refused to make concessions and repeatedly threatened to resume fighting, but neither appears willing to return to all-out war.

"There is no alternative but to accept the rights of the Iranian people as laid out in the 14-point proposal. Any other approach will be completely inconclusive; nothing but one failure after another," Mohammad Bagher Ghalibaf said in a post on X.

"The longer they drag their feet, the more American taxpayers will pay for it."

The Pentagon said on Tuesday that the cost of the war had climbed to nearly $29 billion -- about $4 billion higher than an estimate offered two weeks ago.

Iran sent its latest proposal in response to an earlier US plan, details of which remain limited. Media reports have said the American plan involved a one-page memorandum of understanding aimed at ending the fighting and establishing a framework for negotiations on Iran's nuclear programme.

Iran's foreign ministry said its response called for ending the war on all fronts, including Lebanon, halting the US naval blockade on Iranian ports and securing the release of Iranian assets frozen abroad under longstanding sanctions.

But Trump slammed Tehran's reply as "TOTALLY UNACCEPTABLE", saying the US would enjoy a "complete victory" over Iran and that the truce that has halted fighting for over a month was on its last legs.

In a show of defiance, Iran's Revolutionary Guards said they carried out drills in Tehran aimed at "enhancing combat capability to confront any movement of the American-Zionist enemy", state media reported Tuesday.

Defence Ministry spokesman Reza Talaei-Nik said that if the US "does not submit to the rightful and definitive demands of the Iranian nation in the diplomatic arena, it should expect a repeat of its defeats on the military battlefield".

- 'Living day to day' -

The war of words has unnerved people in Iran who do not know what the coming months will bring.

"We are just trying to dig our nails into anything that could help us survive. The future is so uncertain and we are just living day to day," Maryam, a 43-year-old painter from the capital Tehran, told Paris-based journalists.

"We are trying to find a way to continue. Keeping hope is very difficult right now."

Trump's angry reaction to Iran's counteroffer sparked a spike in oil prices and dashed hopes that a deal could be quickly negotiated to reopen the Strait of Hormuz to commercial shipping.

Iran is restricting maritime traffic in the waterway and has been setting up a payment mechanism to charge tolls for crossing ships, sparking a global energy crisis that the head of Saudi oil giant Aramco has described as the largest energy supply shock "the world has ever experienced".

US officials have stressed it would be "unacceptable" for Tehran to maintain control of the strait, which usually carries about a fifth of the world's oil and natural gas.

"Iran should not use this strait as a weapon to pressure or to blackmail the Gulf countries," Qatari foreign minister Sheikh Mohammed bin Abdulrahman Al Thani said on Tuesday.

Iran's leaders "think they can outlast Trump", said Sanam Vakil, director of the Middle East and North Africa Programme at the Chatham House think tank.

Tehran was "committed to negotiations", Vakil added, but wanted "to extract concessions because of their improved hand".

- Battlefield 'hell' -

On the war's Lebanon front, deadly Israeli strikes continued in the south on Tuesday, according to the health ministry, as fighting wore on despite a ceasefire agreement.

Israel has intensified its attacks as it trades fire with Iran-backed Hezbollah even after the April 17 truce.

More than 2,880 people have been killed in Lebanon since the country was dragged into the wider war on March 2, according to the health minister -- including 380 since the truce took hold.

Hezbollah chief Naim Qassem said on Tuesday his group's weapons were not part of a third round of upcoming negotiations between Lebanon and Israel this week, vowing not to surrender "however great the sacrifices".

"We will not abandon the battlefield and we will turn it into hell for Israel," he said in a statement.

bur-smw/dcp

Saudi Aramco