Iran said a return to war with the US was unlikely, but President Donald Trump expressed dissatisfaction with Tehran's latest offer, leaving the global economy on edge.
Fighting paused since an April 8 ceasefire, negotiations to bring an end to the conflict and resume trade through the blockaded Strait of Hormuz have stalled.
Senior Iranian Revolutionary Guards official Mohammad Akbarzadeh said the likelihood of a return to war was low due to the enemy's weakness, but warned the military was 'lying in wait with full magazines' in the event of an attack.
Trump said he was in no rush to reach an accord, despite saying at the weekend that one was close, adding 'either that or we'll have to just finish the job.'
Hopes for an imminent deal sent benchmark oil contracts falling more than five percent, but the White House swiftly blasted an Iranian state TV report as 'a complete fabrication.'
The Middle East war erupted in late February with US-Israeli strikes on Iran, engulfing the region and sending oil prices skyrocketing.
