The United States and Iran have both signaled they'd rather not return to the war that's been on hold since the April 8 ceasefire - which is diplomatic for 'we're exhausted but too proud to admit it.' Neither side has let the steady drumbeat of military exchanges derail talks being mediated by Pakistan, Qatar, and others, because nothing says 'good faith negotiation' like keeping your warships within striking distance.
The US still has powerful naval and air forces poised near Iran, just in case diplomacy needs a little reminder of who has bigger toys. Meanwhile, Iran has kept its forces on high alert, using the ceasefire to reorganize and repair damage from US and Israeli strikes - basically, a pit stop in the war of attrition. Armed tension in and around the Gulf opens up a clear risk of miscalculation, which is war-speak for 'someone might sneeze and trigger World War III.'
The US is trying to pressure Tehran into concessions by demonstrating proximity and destructive capability; Iran is reminding Washington that its determination to resist is undiminished and, if necessary, it will attack American bases and Gulf infrastructure. The first objective on the long, possibly unreachable road to a wider deal is continuing the ceasefire and agreeing on a 'memorandum of understanding' for more talks - because nothing says progress like a document that means whatever you want it to mean.
Israel's declaration that its bombers would return to Lebanon has narrowed Donald Trump's options even more. Prime Minister Benjamin Netanyahu won't lose sleep if his renewed offensive makes a US-Iran deal harder; he didn't want the ceasefire in the first place. As far as he's concerned, any deal between America and Iran is a bad deal - unless it involves more bombs. Iran continues to support Hezbollah, its ally in Lebanon, and has indicated that a wider deal must include an end to the Israeli offensive. Trump seems, for now, to be trying to restrain Israel, which is like trying to hold back a Labrador at a steakhouse.
As for the Strait of Hormuz, Iran will require a price - likely sanctions relief or unfrozen assets - to reopen the waterway, which looks like a prerequisite for serious negotiations. Only a trickle of ships is getting through what was once a vital, busy shipping lane since Iran closed it after being attacked by the US and Israel on February 28. Saudi Arabia is piping some oil to its Red Sea ports, and the UAE has a pipeline to terminals on the Gulf of Oman, bypassing the Strait. But the rest of the world has still lost about 20% of its usual oil and gas supply, plus other vital exports. Keeping the Strait closed spells disaster for much of the global economy; the US no longer depends on Gulf oil, but petrol prices in America are still set by the global market - so everyone gets to share the pain.
Trump is in a bind, enmeshed in the consequences of the gross blunder he made by going to war assuming an easy victory. He and Netanyahu fatally underestimated how much Iran's regime would resist and ride out their attacks. There's no easy way out, and Iran wants to keep it that way. Trump needs the Strait reopened, but the war is deeply unpopular in the US, and re-escalating it would turn even more Americans against it. His problem: the concessions Iran requires are opposed by hawks in his own Republican Party and by his own desire to parade a victory. He's deeply allergic to any comparison between any deal he makes and the 2015 nuclear deal under Barack Obama, which he condemned and withdrew from.
Iran's rulers believe, with some justification, that they're fighting for their regime's existence. More US strikes with or without Israel aren't going to budge them on that. The wealthy Arab oil states of the Gulf have suffered long-term economic damage and don't want more; their business model depends on the Gulf being a stable hub for the global economy. The war has dealt a severe blow, and restoring their aura of stability will take years. Qatar is a full mediating partner with Pakistan; the UAE has doubled down on its strategic relationship with Israel, hosting the Iron Dome missile defense system and Israeli soldiers to operate it. Saudi Arabia has attacked Iran, they say in retaliation, but senior Saudi sources insist they acted independently - not as part of the US-Israel coalition - because nothing says 'independent' like bombing your neighbor.
When Trump and Netanyahu went to war with Iran, both said their air power would remove the Islamic regime. They misunderstood a regime that has survived nearly half a century despite war, sanctions, and isolation. Now the US and Israel are living with the consequences - and so is the rest of the world.