Large parts of Islamabad have been effectively shut down under sweeping security measures imposed ahead of expected US-Iran talks, leaving residents cut off from work, transport and essential services as uncertainty persists over whether the negotiations will take place.

Public transport has been suspended, offices closed and workers instructed to operate from home where possible. Streets in the capital remain largely empty, with movement restricted and security personnel from the army and police deployed across key routes.

For many residents, the situation has drawn comparisons with restrictions imposed during the COVID-19 pandemic, though officials say the current measures are linked to security preparations for high-level diplomatic engagements.

The restrictions have also extended to neighboring Rawalpindi, intensifying disruption across the twin cities that form a major administrative and economic hub. While authorities have framed the measures as necessary to ensure safety for visiting delegations, delays and uncertainty surrounding the talks have heightened public frustration.

Workers living in temporary accommodations have been among the hardest hit. Following a government directive, many hostel residents were required to vacate their rooms on short notice, forcing thousands to seek alternative arrangements. Some returned to their hometowns, while others relied on friends or colleagues for temporary shelter.

Areej Akthar, a health officer at the Pakistan Institute of Medical Sciences, said the sudden eviction created confusion and distress. She was able to travel back to her village, approximately three hours away, but said many others lacked similar options. According to her account, workers from distant regions struggled to find accommodation as they waited for clarity on when restrictions might be lifted.

With public transport suspended, many displaced workers have been unable to return to their jobs. Akthar described the situation as restrictive, noting that those dependent on shared housing could not afford alternative arrangements.

The uncertainty surrounding the duration of the lockdown has compounded concerns, particularly for those in lower-income groups.Economic pressures have intensified as the restrictions intersect with broader regional developments.

Since late February, escalating tensions involving the United States, Israel and Iran have disrupted global energy markets. Iran’s closure of the Strait of Hormuz, a critical route for oil and gas shipments, has contributed to supply shortages affecting countries including Pakistan.

In Islamabad, fuel shortages have led to power outages lasting several hours daily, while limited availability of cooking gas has forced many restaurants to shut down. Businesses that had managed to continue operations amid the energy constraints have now been closed due to the security lockdown, further reducing economic activity.

Transport workers have also reported sharp declines in income. Taxi drivers in the capital said their earnings have dropped by about half as movement restrictions reduced demand. Daily wage earners have been particularly vulnerable, with many unable to work for several consecutive days.

Muhammad Zubair, a labourer in Islamabad, said the loss of income had immediate consequences for his household. Speaking from a roadside location, he questioned the benefits of hosting high-level diplomatic talks when basic economic needs remain unmet. He said that without work, he could not provide food for his family, reflecting concerns widely shared among informal sector workers.

The disruption has extended beyond employment to education and administrative processes. Authorities have relocated civil service examinations for more than 1,200 candidates to Lahore, approximately 370 kilometers from the capital. Candidates expressed concern over the additional financial burden and logistical challenges associated with travel.

Yasir Mushtaq, one of the candidates, said he would need to borrow money to attend the examination. He also highlighted the difficulties faced by female candidates, noting that some may be unable to travel without family accompaniment and could therefore miss the opportunity to sit for the exams.

Officials have acknowledged the scale of disruption, with one senior figure describing the situation as a nationwide slowdown linked to external geopolitical developments. The official said the country appeared to be in a holding pattern, awaiting decisions from Washington and Tehran regarding the proposed negotiations.

Despite the extensive preparations, uncertainty remains over whether the talks will proceed as planned. In the absence of a confirmed timeline, residents continue to face restrictions with no clear indication of when normal activity will resume.The prolonged lockdown has raised questions about the balance between security requirements and economic sustainability.

While authorities have not publicly indicated a timeline for lifting restrictions, the ongoing disruption is likely to deepen challenges for vulnerable populations already affected by rising energy costs and reduced economic opportunities.

A Pakistani source involved in the negotiations said discussions were “on track” for Wednesday, despite earlier indications from Iran that it might not attend. U.S. President Donald Trump could join the talks either in person or virtually if an agreement is reached, the source added.

U.S. Vice President JD Vance is expected to travel to Pakistan for the переговоры, according to media reports, while Iranian officials said Tehran was “positively reviewing” whether to send a delegation, without confirming participation.

The diplomatic push comes as a two-week ceasefire in the conflict, which began on February 28, nears its end. A Pakistani source said the truce is expected to expire late Wednesday U.S. time.Financial markets reacted to signs of renewed diplomacy, with oil prices falling more than $1 and equities rising in early Asian trading amid expectations that talks could resume.

Brent crude traded near $94 a barrel, while U.S. West Texas Intermediate fell below $88.Tensions remain elevated, however, following disputes over the U.S. blockade of Iranian ports and the recent interception of an Iranian vessel.

Tehran condemned the seizure and warned Washington would bear responsibility for any escalation.Iranian officials also reiterated that they would not negotiate under pressure. Senior figures, including Mohammad Bagher Qalibaf, accused Washington of attempting to force concessions through economic and military pressure.

Washington has said it seeks an agreement that would prevent Iran from developing nuclear weapons while stabilizing energy markets. Tehran, for its part, is seeking relief from sanctions and an end to hostilities without compromising its nuclear program.

The strategic importance of the Strait of Hormuz remains central to the negotiations, as the waterway handles a significant share of global oil and gas shipments and has been affected by restrictions imposed during the conflict.

Pakistan, acting as a mediator, has deployed nearly 20,000 security personnel in Islamabad ahead of the potential talks, underscoring the high stakes and security concerns surrounding the negotiations.

Trading volumes of the Iranian currency have reached as much as $6 million a day in Pakistan’s open market, according to the Exchange Companies Association of Pakistan, with demand accelerating after reports of renewed negotiations between Washington and Tehran.

The rally has been fueled in part by Islamabad’s diplomatic outreach, with Asim Munir visiting Iran and Shehbaz Sharif undertaking a regional tour following high-level U.S.-Iran talks hosted in the Pakistani capital. Market participants say these developments have strengthened expectations of a potential breakthrough.

The Iranian riyal has risen by around 50% in Pakistan’s informal market since late February, climbing from about Rs10,000 to Rs15,000 per 10 million riyals after talks began in Islamabad on April 11, ECAP data shows.Small investors are increasingly participating in the trend.

Muhammad Akbar, a chauffeur in Karachi, said he had invested part of his monthly income into the currency, hoping to profit if negotiations succeed. “I have become a millionaire,” he said, referring to the large nominal value of riyals he now holds.Others have built significantly larger positions.

Retail investor Azam Khan said he had accumulated hundreds of millions of riyals as the currency gained traction among traders seeking quick returns.Market participants say the surge reflects heightened expectations rather than underlying economic strength.

Zafar Sultan Paracha said demand had surged across investor categories, though he cautioned that trading volumes may be even higher due to undocumented transactions.“People’s expectations are very high,” Paracha said, urging investors to base decisions on fundamentals rather than speculation.Economists warn the rally bears hallmarks of behavioral bias rather than structural recovery.

Muhammad Waqas Ghani described the trend as a “gambler’s fallacy,” where investors assume a rebound is likely simply because the currency has weakened in the past.He said Iran continues to face deep economic challenges, including liquidity shortages and stress in its banking system, which limit the scope for sustained appreciation.

Without broader reforms or durable sanctions relief, gains are likely to remain localized to Pakistan’s market rather than reflecting a global revaluation.Some investors remain cautious. Isra Ghous Rasool, a business student and stock market participant, said volatility linked to geopolitical developments made the currency too risky. “There’s simply too much volatility for me to comfortably manage,” she said.

Pakistan has also taken steps to facilitate trade through Iran, temporarily easing export rules for shipments of goods to Central Asia via Iranian territory, a move analysts say may have contributed modestly to the currency’s local demand.

Still, analysts say the current surge is driven primarily by speculation tied to geopolitical expectations rather than economic fundamentals, leaving investors exposed to sharp reversals if diplomatic progress stalls.

The discussions, held days after a Pakistan-brokered ceasefire, marked the first direct engagement between senior U.S. and Iranian officials since Iran’s 1979 Islamic Revolution. Delegations led by U.S. Vice President JD Vance and Iranian Parliament Speaker Mohammad Bagher Qalibaf met over more than 20 hours at Islamabad’s Serena Hotel, with Pakistani mediators shuttling between the sides.

Despite moments when negotiators appeared close to a framework agreement, talks ultimately stalled over key issues including Iran’s nuclear program, control of the Strait of Hormuz, and access to frozen assets, according to 11 sources familiar with the discussions.

A U.S. official said Washington’s core objective remained ensuring Iran does not obtain a nuclear weapon, while Iranian officials emphasized sovereignty concerns, sanctions relief, and broader security guarantees.

Iran has consistently denied seeking nuclear weapons but maintains its right to uranium enrichment.Sources described a tense and shifting atmosphere, with periods of optimism giving way to deadlock. At one stage, the sides were “80 percent” toward an understanding before unresolved political decisions derailed progress, one source said.

Pakistan played a central mediating role, with Prime Minister Shehbaz Sharif confirming that efforts to bridge differences are ongoing. Officials said communication between Tehran and Washington continues through intermediaries, even after the formal talks ended.

U.S. President Donald Trump said on Monday that Iran had reached out seeking a deal, though this could not be independently verified. A White House spokesperson reiterated that Washington’s position remains unchanged, particularly its demand that Iran abandon any pathway to nuclear weapons.

Iranian officials signaled deep mistrust, citing past negotiations and subsequent military actions, while also indicating willingness to continue discussions under defined conditions.The Strait of Hormuz remains a central point of contention, with Iran asserting control over the waterway and the United States insisting on restoring unrestricted navigation.

The dispute has had significant implications for global energy markets, contributing to volatility and supply concerns.Mediators, including Pakistani officials and regional diplomats, have continued backchannel communications in an effort to revive talks.

Both sides face mounting pressure to de-escalate, with economic costs rising and broader geopolitical risks intensifying.

Two Pakistani officials, speaking on condition of anonymity, said Islamabad has offered to again facilitate negotiations, although the final venue would depend on whether Washington or Tehran request an alternative location.

They described the initial round of talks as part of an ongoing diplomatic process rather than a one-off effort.The proposal follows marathon negotiations held on April 12 that ended without a breakthrough but were marked by what U.S. Vice President JD Vance described as “some progress,” particularly on Washington’s demands regarding Iran’s nuclear program.

In an interview with Fox News, Vance said Iranian negotiators had moved closer to U.S. positions on the removal of nuclear material and mechanisms to prevent future uranium enrichment, but were unable to finalize a deal, suggesting decisions may require approval from authorities in Tehran.

“There really is, I think, a grand deal to be had here,” Vance said, adding that the next step rests with Iran.The White House did not confirm whether preparations for a second round are underway. Press Secretary Karoline Leavitt reiterated that U.S. negotiating positions remain unchanged and pointed to increased pressure on Iran following the implementation of a U.S. naval blockade.

Multiple sources familiar with the discussions said both sides are considering further in-person talks aimed at reaching an agreement before the ceasefire expires next week. While Islamabad remains a leading candidate to host the meeting, other locations such as Geneva are also under consideration, with timing still undecided but potentially within days.

A diplomat involved in mediation efforts said there is growing alignment on holding another round, though details on the level of representation and agenda remain unresolved.U.S. President Donald Trump said earlier that Iran had reached out seeking a deal, underscoring continued engagement between the two sides even as tensions persist.

Speaking in an interview with Fox News on Monday, Vance said the United States had clearly defined its “red lines” during negotiations held over the weekend in Pakistan, where he led a U.S. delegation in discussions with Iranian officials.“I really think the ball is in the Iranian court, because we put a lot on the table,” Vance said, adding that the U.S. position leaves no room for flexibility on key issues.

He identified two core demands: U.S. control over Iran’s enriched uranium stockpile and the establishment of a robust verification mechanism to ensure Tehran does not develop nuclear weapons capability. “It’s one thing for the Iranians to say that they’re not going to have a nuclear weapon.

It’s another thing for us to put in place the mechanism to ensure that’s not going to happen,” he said.The talks in Islamabad marked the highest-level engagement between the two sides in years but ended without an agreement to halt the more than five-week conflict involving U.S. and Israeli forces against Iran.

Vance said that, as part of a two-week ceasefire agreed last week, Washington also expects Iran to fully reopen the Strait of Hormuz, a critical global shipping route that has been effectively closed by Iranian forces.

Despite the lack of a deal, both sides have indicated a willingness to continue discussions, with diplomatic efforts ongoing through intermediaries to prevent further escalation.

Pakistan’s Foreign Minister Ishaq Dar said it was “imperative” that both parties maintain their ceasefire commitments, adding that Islamabad would continue facilitating dialogue between Washington and Tehran following the inconclusive talks.

U.S. Vice President JD Vance, who led the American delegation, said the absence of a deal was “bad news for Iran much more than it’s bad news for the United States,” reiterating Washington’s demand for a firm commitment from Tehran not to pursue nuclear weapons capability.

He said the United States had made its “red lines” clear, including preventing Iran from acquiring both nuclear weapons and the means to rapidly develop them.

Iranian officials rejected the U.S. position, with state-linked Tasnim news agency reporting that “excessive” American demands had hindered progress. Tehran signaled that discussions would continue, with technical teams expected to exchange documents in follow-up engagements.

Iran’s parliamentary speaker Mohammad Baqer Qalibaf said the U.S. had failed to build trust during the talks despite what he described as “forward-looking” proposals from the Iranian side. He emphasized longstanding skepticism rooted in past negotiations, saying Washington must demonstrate credibility before progress can be made.

Iran’s foreign ministry also downplayed the outcome, stating that no agreement had been expected in a single session and expressing confidence that diplomatic contacts would continue with Pakistan and other regional actors.

Former Iranian foreign minister Mohammad Javad Zarif attributed the breakdown to what he called U.S. attempts to “dictate” terms, warning that negotiations with Iran would not succeed under unilateral conditions.

The Islamabad meeting marked the highest-level direct engagement between the United States and Iran in more than a decade and the most senior talks since the 1979 Islamic Revolution.

The discussions were aimed at halting a conflict that began over six weeks ago and has driven up global oil prices while threatening key maritime routes.Central to the negotiations was the Strait of Hormuz, a critical chokepoint for roughly one-fifth of global energy supplies.

The U.S. military said it was preparing to ensure safe navigation through the waterway, including mine-clearing operations, while Iranian state media denied any U.S. naval transit in the area.

Tehran has demanded control over the strait, war reparations, and broader ceasefire arrangements extending to regional theaters including Lebanon. U.S. officials have focused on securing freedom of navigation and curbing Iran’s nuclear enrichment capabilities.

The talks took place under tight security in Islamabad, where thousands of paramilitary forces were deployed. Pakistani officials described fluctuating tensions during the discussions, with “mood swings” and intermittent progress reported by sources familiar with the negotiations.

The Iranian delegation, which arrived dressed in black to mourn those killed in the conflict, also raised concerns about a U.S. airstrike on a school near a military compound, an incident the Pentagon has said is under investigation.

Despite the impasse, analysts noted the seniority and size of the Iranian delegation as an indication of Tehran’s willingness to engage, even as deep mistrust continues to define the diplomatic landscape.

The negotiation are aimed at ending a six-week conflict between the United States and Iran that has killed thousands across the Middle East and disrupted global energy supplies, contributing to rising inflation and slower economic growth.

The arrival of the U.S. delegation marks a key step in diplomatic efforts to de-escalate the conflict, with Washington and Tehran expected to begin negotiations shortly in the Pakistani capital.

Pakistan has implemented heightened security measures in Islamabad as it hosts the talks, which are seen as a critical opportunity to stabilize the region and address broader economic fallout linked to the war.

The U.S. delegation, led by Vice President JD Vance and including special envoy Steve Witkoff and adviser Jared Kushner, was en route to the Pakistani capital after a stop in Paris. The Iranian side, headed by parliamentary speaker Mohammad Baqer Qalibaf and Foreign Minister Abbas Araghchi, arrived on Friday.

Qalibaf said Iran did not trust the United States based on past negotiations and warned that talks would not proceed unless Washington fulfilled earlier commitments, including unblocking Iranian assets and securing a ceasefire in Lebanon.

Iranian officials have linked progress in the talks to developments in the parallel conflict involving Hezbollah, a stance rejected by Washington and its allies.U.S. President Donald Trump said on social media that Iran “has no cards,” adding that Tehran’s leverage was limited to disrupting international waterways.

Vice President Vance, speaking en route, expressed cautious optimism about the negotiations but warned that the U.S. would respond firmly if it perceived bad-faith tactics.The talks come amid a fragile ceasefire announced earlier this week following weeks of U.S. and Israeli strikes on Iran and retaliatory actions by Tehran.

While the ceasefire has paused direct attacks, it has not resolved Iran’s blockade of the Strait of Hormuz, which continues to disrupt global energy flows.Pakistan imposed extensive security measures in Islamabad ahead of the negotiations, with Prime Minister Shehbaz Sharif describing the meeting as “make-or-break.” Thousands of security personnel were deployed across the city.

Parallel tensions persist in Lebanon, where Israeli operations against Hezbollah have continued despite diplomatic efforts. Lebanese President Joseph Aoun has called for a ceasefire as a condition for broader negotiations, while Israeli officials have signaled that upcoming talks with Lebanese representatives in Washington would proceed without linking them to a truce.

Iran has also pushed for broader concessions, including the lifting of sanctions and recognition of its authority over transit through the Strait of Hormuz, a proposal that would significantly alter regional power dynamics. While Iranian vessels were reported to be moving freely through the strait, shipping by other nations remains constrained.

The disruption to energy supplies has contributed to inflationary pressures and slowed global economic activity, with analysts warning that the impact could persist even if negotiations lead to a reopening of the route.Iran’s leadership has maintained a firm stance ahead of the talks.

Mojtaba Khamenei said Tehran would seek compensation for wartime damage and hold those responsible accountable.Despite U.S. claims of degrading Iran’s military capabilities, Tehran retains missile and drone capacity and a significant stockpile of highly enriched uranium, underscoring the challenges facing negotiators in reaching a comprehensive agreement.