TEHRAN: The release of frozen Iranian funds has become a key issue in negotiations between Tehran and Washington aimed at ending their war, a senior Iranian official said.

Iran has been subject to asset freezes and sweeping sanctions by the United States and other Western countries since its 1979 Islamic revolution that toppled the US-backed Shah, Mohammad Reza Pahlavi.

In an interview broadcast on Friday (Jun 5), Mohsen Rezaei, a former commander of the Islamic Revolutionary Guard Corps and an adviser to Iran's supreme leader, said the talks were failing over the release of Iranian assets.

"If he (Trump) wants to reach an agreement with Iran, this US$24 billion is a test of trust that Iran wants to have with Trump," he told CNN, according to an English translation of his remarks provided by the channel.

"This is a test that America must pass and the path will be opened," he said, adding that "this is our own money, not America's money".

While there is no official figure for the total amount of frozen Iranian assets, media reports have estimated the sum at between US$100 billion and US$123 billion.

Iran has conditioned an agreement to end the war on several demands, including the release of the frozen funds.

Fighting broke out on Feb 28 when the United States, backed by Israel, attacked Iran, killing former supreme leader Ayatollah Ali Khamenei and several senior military commanders.

The attacks prompted Iran to launch retaliatory missile and drone strikes against Israel and US allies in the Gulf.

A ceasefire took effect on Apr 8 but diplomatic efforts to permanently end the war have yet to produce a settlement.

Among its conditions, Iran has also called for an end to hostilities on all fronts, including in Lebanon, where Tehran-backed Hezbollah fighters have been battling Israel.

Despite their ceasefire, tensions remain high between Tehran and Washington.

Rezaei warned that Iran would "drag the war" beyond the Gulf if the United States resumed hostilities, bringing "another dimension to the war".

But he added that "the possibility of war is low".