Accepting the proposal would mark a dramatic victory for the regime and would leave the US and its allies much worse off than they were at the start of the war.

The plan would allow Iran to continue enriching uranium while forcing the US to withdraw all combat forces from the region.

The plan did not specify what would be counted as “the region”, but the US has military bases throughout the Middle East.

It would force the lifting of all primary and secondary sanctions on Iran and require a US guarantee of non-aggression.

It would also require “compensation for damages inflicted on Iran”.

Iran would retain its $US2 million ($A2.85 million) toll for ships to exit the Strait of Hormuz, under their 10-point peace proposal issued to the US.

The toll would be split between Iran and Oman, the Arabian nation on the other side of the strait.