DOHA, Qatar—A power struggle inside Tehran is threatening U.S.-Iran peace talks, with civilian leaders seeking billions in frozen assets and hardline military officials pressing for control of the Strait of Hormuz, said officials familiar with the negotiations.

Civilian leaders headed by President Masoud Pezeshkian are aiming to free up billions of dollars in frozen funds to bring some relief to the millions of Iranians struggling with the economic aftershocks of the war and the critical damage to its oil industry.

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