Iran’s supreme leader on Wednesday criticized the U.S. proposal for a nuclear deal, signaling a major setback in President Trump’s effort to secure an agreement boxing in the Islamic Republic’s rapidly advancing nuclear program.

Ayatollah Ali Khamenei did not reject the initial U.S. proposal, which Trump envoy Steve Witkoff presented to Iranian negotiators on Saturday. 

But the top Iranian official underscored Tehran’s demand that it would not give up enrichment, a key sticking point that U.S. officials say is necessary to eliminate any potential threat of nuclear weaponization.

During a televised speech on Wednesday, Khamenei said that the U.S. proposal "contradicts our nation's belief in self-reliance and the principle of 'We Can,’” Reuters reported.  

"Uranium enrichment is the key to our nuclear programme and the enemies have focused on the enrichment," he continued. 

The supreme leader, who has final say on all state matters, did not signal Iran is abandoning the talks, but made clear that Tehran abandoning its enrichment capability was non-negotiable, despite insistence from Trump and other officials. 

One potential route around the gridlock is Iran accepting a regional uranium enrichment consortium, Axios reported, which would supply nuclear fuel to countries that want to develop civilian nuclear programs and be monitored by inspectors with the International Atomic Energy Agency. 

But an Iranian official told Axios that Iran wants the consortium based inside the country. 

"If the consortium operates within the territory of Iran, it may warrant consideration. However, should it be based outside the borders of the country, it is certainly doomed to fail," the senior Iranian official told Axios.

U.S. and Iranian officials have held five rounds of talks aimed at reaching a deal over Iran’s nuclear program, which the U.S. says is aimed at preventing Iran from being able to develop a nuclear weapon. Iran denies that it wants to build a nuclear weapon.