Iranian President Masoud Pezeshkian publicly defended talks with the United States on Monday, arguing that Tehran should not reject diplomacy even as he acknowledged fuel shortages, economic pressure and war damage at home.

The remarks, delivered at an event in Tehran and reported by Iran International, came at a highly sensitive moment in the U.S.-Iran standoff. President Donald Trump said Monday that he had held off on a planned military strike against Iran after Gulf leaders urged more time for diplomacy, while warning that U.S. forces remained ready if negotiations failed.

Pezeshkian’s comments were aimed partly at domestic critics. Hardline figures inside Iran have argued that further talks with Washington should not proceed unless the United States first makes major concessions, including sanctions relief and the release of blocked Iranian assets. Pezeshkian rejected the idea that refusing negotiations was a strategy in itself, saying Iran could defend its rights while still speaking to its adversary.

“If we do not negotiate, what should we do? Fight until the end?” Pezeshkian said, according to Iran International. He described the approach as negotiating “with dignity,” a phrase that appeared designed to reassure Iranian factions that talks do not necessarily mean surrender.

The comments exposed a political split in Tehran over whether engagement with Washington is a tactical necessity or a dangerous concession. Former Revolutionary Guards commander Mohammad Ali Jafari was among those cited by Iran International as opposing further negotiations unless Iran’s conditions were met. Alaeddin Boroujerdi, deputy head of parliament’s National Security Committee, has also argued that talks would be futile without sanctions relief and the release of blocked funds.

That debate is unfolding against an increasingly severe economic backdrop. Pezeshkian said Iranian officials should be honest about the pressure facing the country and should not pretend the state had avoided damage. He acknowledged that gasoline production capacity had declined after strikes hit energy infrastructure, a politically sensitive admission in a country where fuel availability is closely tied to public confidence and social stability.

AP reported earlier this month that Iran’s economy was under heavy strain from war, sanctions and a U.S. naval blockade, with ordinary Iranians facing steep price increases, job losses and business closures. AP cited Iran’s official statistics center as reporting annual inflation of 53.7% in mid-April, with food inflation above 115% from a year earlier. The rial had also lost more than half its value over the previous year, according to the report.

For Washington, Pezeshkian’s speech may be read as evidence that economic and military pressure is affecting Iran’s internal calculations. But it does not necessarily mean Tehran is preparing to accept U.S. terms. Iranian officials continue to frame negotiations around national rights, sanctions relief and resistance to coercion, while hardliners remain wary that talks could lock Iran into concessions under threat of force.

The U.S. side is also sending mixed signals: diplomacy is being kept open, but military pressure has not been removed. Reuters reported that Trump said he had paused a planned attack on Iran and signaled that a nuclear deal could still be possible. AP also reported that Trump described “serious negotiations” as the reason for holding off, after leaders of Qatar, Saudi Arabia and the United Arab Emirates asked for additional time.

The Gulf states’ role is significant. Qatar, Saudi Arabia and the UAE have strong incentives to prevent a wider regional war, protect energy infrastructure and avoid further disruption around the Strait of Hormuz. A prolonged confrontation involving Iran, the United States and Israel would carry direct risks for Gulf shipping, oil exports, airspace, investment flows and domestic security.

Iran’s own economy is already being squeezed by the same strategic geography. The country’s southern ports and oil exports are central to its trade system, and disruptions to Gulf shipping have compounded the impact of sanctions and war damage. Iran International reported, citing Reuters, that the U.S. naval blockade of Iranian ports sharply reduced oil exports in April compared with March, leaving growing volumes of crude stranded on tankers.

Pezeshkian’s decision to discuss economic pain publicly may also reflect a need to manage expectations among Iranians. Leaders in Tehran have often presented resilience as a national duty, but the scale of inflation, supply disruption and damaged infrastructure makes that message harder to sustain. The president’s remarks suggest an attempt to combine realism about hardship with a political argument that diplomacy can be pursued without abandoning Iran’s stated positions.

The U.S. relevance extends beyond nuclear diplomacy. Energy markets, inflation risks and military deployments in the Gulf all connect Iran’s domestic crisis to American economic and security interests. Any renewed U.S. strike could affect oil prices, shipping insurance, regional basing arrangements and the security calculations of U.S. partners. Conversely, a credible negotiating track could ease pressure on global markets even if no final agreement is immediately reached.

The diplomatic path remains uncertain. The key unresolved issues include Iran’s nuclear activities, sanctions relief, blocked assets, the status of maritime restrictions, the durability of any ceasefire and the role of regional mediators. Iran’s hardliners appear unwilling to accept talks without up-front concessions, while Washington continues to insist that the military option remains available if diplomacy stalls.

Pezeshkian’s remarks therefore mark less a breakthrough than a revealing moment. Iran’s president is openly arguing that negotiation is necessary at a time when economic strain is increasingly visible. The United States and its Gulf partners are testing whether that pressure can produce a deal rather than another escalation. Between those two pressures sits a fragile diplomatic opening shaped as much by domestic politics in Tehran as by military decisions in Washington.