Secretary of State Marco Rubio said Sunday the US will pursue all diplomatic avenues with Iran and that a framework deal to reopen the Strait of Hormuz appears close.
But Rubio also warned of 'alternatives' if diplomacy fails.
'We have what I think is a pretty solid thing on the table in terms of their ability to open up the Strait,' Rubio told reporters in New Delhi, India.
'We're either going to have a good agreement, or we're going to have to deal with it another way. We'd prefer to have a good agreement,' Rubio said.
Rubio added that President Donald Trump 'is not going to make a bad deal' and reiterated demands that Iran not be allowed to have a nuclear weapon.
He said Washington awaits Iran's response and that the framework deal has 'a lot of support' in the Gulf and globally.
Rubio's comments follow Trump's weekend signal of progress in talks with Iran, indicating a framework deal is near. However, Trump later suggested he is in no rush to sign, a notion Rubio echoed Monday.
Rubio noted the US is working on an Israel-Lebanon peace deal separately but said Hezbollah complicates negotiations.
Iranian state media over the weekend said talks with the US are ongoing but not as final as Trump suggested.
Axios reported that the US-Iran framework deal would extend the ceasefire by 60 days, reopen the Strait of Hormuz for commercial shipping, and allow Iran to resume oil exports.
The US will also lift its blockade on Iranian ports and allow Tehran to sell oil internationally.
The draft includes a commitment by Iran not to pursue nuclear weapons and to enter negotiations on future uranium enrichment. Tehran has pledged not to develop a nuclear weapon and has rejected US demands to hand over its enriched uranium stockpile.
Iran's nuclear ambitions and its blockade of the Strait of Hormuz have been key points in recent US-Israeli hostilities.
Iran effectively blocked Hormuz since late February, cutting off a fifth of global oil supply. While some oil tankers have passed in recent weeks, flows remain a fraction of pre-war levels.
Iran was also seen preparing to charge tolls for commercial shipping in Hormuz.
Oil prices fell sharply Monday on optimism over an Iran peace deal, while risk-driven markets and gold prices rallied.
