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There are signs of fresh momentum to end the war, but Trump himself has injected a note of caution.
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But expectations were soon tempered by the US president himself.
Iran said on Wednesday it was reviewing a new proposal from Washington, after US media cited unnamed American officials as saying that the two sides were closing in on a one-page memorandum to end the war in the Gulf.
A source close to mediators in Pakistan told Reuters news agency: "We will close this very soon. We are getting close."
But hours after posting on Truth Social on Tuesday evening that he was suspending Project Freedom to see whether "the Agreement can be finalized and signed", Trump abruptly changed tone.
He said on Wednesday morning that an Iran deal was a "big assumption" and if it was not agreed, bombing at "a much higher level and intensity than it was before" would resume.
The president's threat came less than 24 hours after US Secretary of State Marco Rubio said at the White House that Operation Epic Fury, the American-led military strikes on Iran, was over.
Later on Wednesday morning, Trump expressed optimism in a brief telephone call with PBS about an Iran deal, while acknowledging it had previously proven elusive.
"I felt that way before with them," he said. "So we'll see what happens."
Trump also told PBS it was "unlikely" he would send US envoys for a second round of Iran peace talks in the Pakistani capital Islamabad.
Axios and Reuters had reported that Washington and Tehran were inching closer to a one-page, 14-point memorandum to end the war.
The plan would reportedly aim to bring hostilities to a close, which would then be followed by discussions to unblock the Strait of Hormuz, lift sanctions and curb Iran's nuclear ambitions.
But Axios also reported scepticism among some US officials about a deal and who would even approve such an agre
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