A new proposal aimed at ending tensions between the United States and Iran reportedly triggered a tense phone call between US President Donald Trump and Israeli Prime Minister Benjamin Netanyahu on Tuesday.

According to sources cited in the Axios report, Trump told Netanyahu that mediators were preparing a “letter of intent” that could formally end the conflict and begin a 30-day negotiation period focused on Iran’s nuclear programme and the Strait of Hormuz.

Regional mediators including Qatar, Pakistan, Saudi Arabia, Turkey and Egypt have been working to refine a peace proposal intended to bridge gaps between Washington and Tehran.

The discussions reportedly exposed disagreements between the two leaders over how to handle Iran.

One source cited by the outlet, claimed Netanyahu’s “hair was on fire after the call.”

Trump has continued to publicly express optimism about reaching a deal with Iran while warning military action remains possible if negotiations fail.

“The only question is do we go and finish it up or are they gonna be signing a document. Let's see what happens,” Trump said on Wednesday.

Iran confirmed it is reviewing an updated proposal, though officials have not indicated any major shift in position.

Iran’s Foreign Ministry said negotiations remain ongoing “based on Iran's 14-point proposal”.