Iran has said it is reviewing a United States peace proposal that seeks to end the war, even as the two sides exchanged fire in the Strait of Hormuz on Thursday.

In a post on his Truth Social Platform late on Thursday, US President Donald Trump called Iran’s leadership “lunatics” and warned Tehran would face more severe military action if it did not quickly agree to a deal.

But how is Iran likely to respond to the latest US ceasefire proposals? And is Tehran likely to have to make significant compromises to reach a deal?

Here’s what we know:

What is in the latest US proposal?

According to US media reports, Washington sent Iran a 14-point document earlier this week. Under its proposals, Iran would be required to agree not to develop a nuclear weapon and halt all enrichment of uranium for at least 12 years. It would also be required to hand over an estimated 440kg (970lb) stock of uranium, which it has enriched to 60 percent.

In return, the US would gradually lift sanctions and release billions of dollars in frozen Iranian assets and withdraw its naval blockade of Iranian ports.

Both sides, which are currently engaged in a naval standoff in the Strait of Hormuz, would reopen the critical waterway within 30 days of signing.

Iran has been subject to crippling US sanctions for decades. The lifting of some of these under a 2015 nuclear agreement drawn up with the former Obama administration, five other countries and the European Union, was reversed when Trump unilaterally walked out of the deal in 2018, during his first term as US president.

Billions of dollars of Iranian assets remain frozen in foreign banks due to the ongoing sanctions.

The US proposal follows one submitted by Iran via mediator Pakistan a week ago.

What has Iran said about the latest US proposal?

Iran has yet to formally respond to the latest US plan. However, Iranian leaders have pushed back against it.

Iranian lawmaker Ebrahim Rezaei, a spokesperson for the parliament’s powerful foreign policy and national security committee, described the text as “more of an American wish-list than a reality” this week.

Iran’s Parliament Speaker Mohammad Bagher Ghalibaf appeared to mock US reports that the two sides were close to a deal, writing on social media in English that “Operation Trust Me Bro failed”.

On Thursday, Iran’s military said US forces had targeted an Iranian oil tanker in coastal waters as well as a second vessel near the United Arab Emirates’ Fujairah port, while US air strikes hit civilian areas in Bandar Khamir, Sirik and Qeshm Island in southern Iran. Iranian air defences were also active over western Tehran.

The US, however, said its naval forces came under Iranian missile, drone and fast-boat attacks in the Strait of Hormuz and responded by eliminating “inbound threats” and targeting “Iranian military facilities responsible for attacking US forces”.

Despite the exchange of fire, neither side has yet announced the collapse of the ceasefire, which has been in place since April 8.

Reporting from Tehran, Al Jazeera’s Resul Serdar Atas said an Iranian Foreign Ministry spokesperson has said his side is still reviewing the US proposal.

“There were reports that the response to the proposal was expected to be sent to Pakistani mediators yesterday. This has not been confirmed, but Iranian officials are saying they’re still reviewing it,” Atas said.

“So despite this back and forth and these military confrontations, the diplomatic and mediation efforts seem to be still under way, and both sides are still interested in diplomatically engaging with each other,” he noted.

“Now, after Iran’s response, the picture is going to get pretty clear. So far, despite some optimism, Iranian officials are saying that several US demands are unreasonable, unrealistic and maximalist.”

“There’s a huge gap between the positions of the two parties,” he added.

How many peace proposals have there been so far?

There has been a series of proposals and counterproposals in recent weeks.

Before the US sent Iran its latest plan this week, Tehran had offered up its own, new 14-point proposal in the latest diplomatic step to reach a permanent end to the war last week.

According to Iranian media reports, Tehran’s plan came in response to a Washington-backed nine-point peace proposal, which primarily sought a two-month ceasefire.

However, in its proposal, Iran said it wanted to focus on ending the war rather than just extending the truce and wants all issues resolved within 30 days.

Iran also called for guarantees against future attacks, a withdrawal of US forces from around Iran, the release of frozen Iranian assets worth billions of dollars and the lifting of sanctions, war reparations, the end of all hostilities, including in Lebanon, and “a new mechanism for the Strait of Hormuz”.

A day before the ceasefire between the US and Iran had come into effect, Iran had submitted a 10-point peace plan, which included an end to the conflict in the region, a protocol for safe passage through the Strait of Hormuz, the lifting of sanctions, and reconstruction, the state-run news agency IRNA reported.

Trump, however, stated that while Iran’s 10-point plan was a “significant proposal”, it was “not good enough”.

That proposal from Iran – on April 7 – had come in response to an earlier 15-point plan drafted by the US on March 25.

Washington’s plan included a one-month ceasefire while the two sides negotiated terms to end the war, via Pakistan. Iran had, however, rejected this plan and said a temporary ceasefire would give the US and Israel time to regroup and launch further attacks, and in turn proposed its 10-point plan.

Is Iran likely to compromise to meet US demands?

Some analysts say Iran may have to change its tone on its nuclear programme. Tehran has always wanted to keep the right to enrich uranium as a signatory to the Treaty on the Non-Proliferation of Nuclear Weapons (NPT), but Trump has made the nuclear issue a “red line”.

Iran is believed to have about 440kg (970lb) of uranium enriched to 60 percent. A 90-percent threshold of enriched uranium is needed to produce a nuclear weapon. Under the Obama-era Joint Comprehensive Plan of Action signed with several other states, Iran had been permitted to enrich uranium to 3.67 percent – enough to develop a nuclear power programme. Now, the US is demanding that it be reduced to 0 percent.

Analyst Negar Mortazavi said Tehran may be willing to show greater flexibility on its nuclear programme once the conflict ends, though she added that Iran is unlikely to agree to hand over its enriched uranium directly to the US.

Mortazavi told Al Jazeera that Iran believes negotiations with the Trump administration require “time and patience”, noting Tehran had previously entered talks with Washington only to come under attack on February 28 as those talks were ongoing.

But reporting from Tehran on Thursday, Al Jazeera’s Atas said: “Iranians are saying that, at this stage, they’re not negotiating their nuclear programme; it’s only about ending the war on all fronts.”

He added that Tehran will require direct guarantees from the UN Security Council that it will not be subject to renewed strikes, as well as the lifting of sanctions.

“If that is achieved, in a second phase, they’re ready to discuss their nuclear programme.”

Al Jazeera’s Almigdad Alruhaid also reported from Tehran on Tuesday that Iran has set “a very firm red line” on the nuclear file. “The nuclear enrichment programme is non-negotiable,” he said.

Ali Vaez, director of the Iran Project at the International Crisis Group, told Al Jazeera that amid recent clashes, both sides might have to compromise.

“Both sides would either have to make painful concessions or leave the main areas of disagreement vague if they are to finalise a framework understanding,” he added.

Chris Featherstone, a political scientist at the University of York in the UK, told Al Jazeera that, so far, Iran has held firm to its position in negotiations, and this has really confounded the Trump administration.

“The Iranians have been willing to hold to their positions with little compromise. Many of the positions that the Iranians are reportedly holding in negotiations are the same as those they held in negotiations prior to the US attacks,” he said.

“From the US positions, it appears that Iran would need to compromise significantly, but they have not demonstrated any appetite to make big concessions, likely because they don’t trust the Trump administration to keep to their commitments,” he added.