Iran said Monday it had demanded the release of its frozen assets and the end of a U.S. blockade of its ports, after President Donald Trump angrily rejected Tehran's terms for starting negotiations to halt the Middle East war.

The sharp exchange of messages raised the specter of a return to open conflict in the Gulf, sent oil prices soaring and dashed hopes that a deal could be quickly negotiated to reopen the Strait of Hormuz to commercial shipping.

Israel on Monday condemned the European Union's move to impose new sanctions on Israeli settlers over violence against Palestinians, asserting that Jews have the right to settle in the occupied West Bank.

"The European Union has chosen, in an arbitrary and political manner, to impose sanctions on Israeli citizens and entities because of their political views and without any basis," Foreign Minister Gideon Saar posted on X.

Iran's foreign ministry said Monday it had called for an end to the war across the region and the release of frozen assets abroad in its response to the latest U.S. proposal.

"We did not demand any concessions. The only thing we demanded was Iran's legitimate rights," said ministry spokesman Esmaeil Baqaei in a weekly press briefing.

U.S. President Donald Trump said Sunday he has rejected Iran's response to a U.S. proposal for ending the Iran war, deeming it "totally unacceptable."

"I have just read the response from Iran's so-called 'Representatives.' I don't like it -- TOTALLY UNACCEPTABLE!" Trump posted on his Truth Social platform, without describing elements of Tehran's response.

U.S. President Donald Trump on Sunday accused Iran of "playing games" and laughing at America for decades, but said it soon would be made to stop -- without commenting directly on reports of Tehran's response to Washington's latest peace proposal.

Iran's Islamic Revolutionary Guards threatened Saturday to target U.S. sites in the Middle East if its tankers come under fire, Iranian media reported, as Washington was left waiting for Tehran's response to its latest negotiating position.

Iran's army warned on Sunday that countries complying with U.S. sanctions against the Islamic republic would face difficulties crossing the Strait of Hormuz.

An unknown projectile struck a ship off the coast of Qatar early Sunday morning, a UK maritime agency reported, after Iran's Islamic Revolutionary Guards threatened to target U.S. vessels in the region.

U.S. President Donald Trump said Friday that he was expecting Iran's response to Washington's latest proposal on a deal to ending the Middle East war by "tonight."

A U.S. fighter jet disabled two Iranian-flagged tankers to enforce a port blockade on Friday, prompting retaliatory attacks and rattling a shaky truce as Tehran weighed Washington's latest proposal to end the Middle East war.