Pakistani Prime Minister Shehbaz Sharif on Saturday met with US Vice President JD Vance, special envoy Steve Witkoff and President Donald Trump's son-in-law Jared Kushner, the White House and Sharif's office said.
Hours earlier, the Iranian delegation led by Parliamentary Speaker Mohammad Baqer Qalibaf and Foreign Minister Abbas Araqchi also met with Sharif to determine the timing and manner of possible negotiations, according to local media.
"We will negotiate with our finger on the trigger," Iranian government spokeswoman Fatemeh Mohajerani said on state TV.
"While we are open to talks, we are also fully aware of the lack of trust; therefore, Iran's diplomatic team is entering this process with maximum caution."
Earlier, a senior Iranian source told Reuters the US had agreed to release frozen assets held in Qatar and other foreign banks, but a US official swiftly denied the claim.
The Iranian source welcomed the alleged move as a sign of "seriousness" in the talks, in which Washington is pressing Tehran to reopen the Strait of Hormuz to international shipping.
Qatar's Foreign Ministry did not immediately respond to a request for comment on the assertion about frozen assets.
Iran is also demanding a ceasefire in Lebanon, where Israeli attacks on Iran-backed Hezbollah militants have killed almost 2000 people since the start of fighting in March.
Israel and the US have said the Lebanon campaign is not part of the Iran-US ceasefire.
Trump posted on social media on Friday that the only reason the Iranians were alive was to negotiate a deal.
"The Iranians don't seem to realize they have no cards, other than a short term extortion of the World by using International Waterways. The only reason they are alive today is to negotiate!" he said.
The US delegation landed in two US Air Force planes at an air base in Islamabad on Saturday morning, where they were received by Pakistan's army chief, Field Marshal Asim Munir, and Foreign Minister Ishaq Dar.
The Iranian delegation arrived on Friday dressed in black in mourning for Supreme Leader Ayatollah Ali Khamenei and other Iranians killed in the war.
They carried shoes and bags of some of the students killed during the US bombing of a school next to a military compound, the Iranian government said on X.
If the two sides hold face-to-face negotiations as expected, they would be the highest-level US-Iran talks since the Islamic Revolution of 1979 and the first direct talks since 2015, when they reached a deal on Iran's nuclear program.
Trump scrapped the nuclear deal in 2018 during his first term in office.
Trump on Tuesday announced a two-week ceasefire in the war, which has halted US and Israeli air strikes on Iran.
But it has not ended Iran's blockade of the Strait of Hormuz, which has caused the biggest-ever disruption to global energy supplies, or calmed the parallel war between Israel and Iran-backed Hezbollah in Lebanon.
Strikes on southern Lebanon continued on Saturday morning, Lebanese state media said.
Hezbollah announced it had conducted several military operations against Israeli positions on Saturday, both within Lebanese territory and in northern Israel.
Hours after the ceasefire was announced, Israel launched the biggest attack of the war, killing more than 350 people in surprise strikes on heavily populated areas, Lebanese authorities said.
Tehran's agenda at the talks includes demands for major new concessions, including the end of sanctions that crippled its economy for years.
It also wants acknowledgement of its authority over the Strait of Hormuz, where it aims to collect transit fees and control access in what would amount to a huge shift in regional power.
Iran's ships were sailing through the strait unimpeded on Friday, while those of other countries remained hemmed inside.
