The U.S. and Iran are due to hold talks in Oman on Friday after Tehran requested a change of venue to limit negotiations to its nuclear program, a regional official said, with a build-up of U.S. forces in the Middle East raising fears of a confrontation.

Iran wanted the meeting to take place in Oman as a continuation of previous rounds of talks held in the Gulf Arab country on its nuclear program, asking for a change of location from Turkey to avoid any expansion of the discussions to issues such as Tehran's ballistic missiles, the regional official said.

Iran has said it will not make concessions on its formidable ballistic missile program — one of the biggest in the Middle East — calling that a red line in negotiations. Tehran, which says it replenished its stockpile of ballistic missiles since coming under attack from Israel last year, has warned that it will unleash its missiles to defend the Islamic Republic if its security is under threat.

The regional official, speaking on condition of anonymity, said Iran had since the beginning stressed that it would only discuss its nuclear program, while Washington wanted other issues on the agenda.

Oil prices extended gains on Wednesday after the U.S. shot down an Iranian drone and armed Iranian boats approached a U.S.-flagged vessel in the Strait of Hormuz, rekindling fears of an escalation between Washington and Tehran.

President Donald Trump has warned that "bad things" would probably happen if a deal could not be reached, ratcheting up pressure on the Islamic Republic in a standoff that has led to mutual threats of air strikes and stirred fears of a wider war.

On Tuesday, the U.S. military shot down an Iranian drone that "aggressively" approached the Abraham Lincoln aircraft carrier in the Arabian Sea, the U.S. military said, in an incident first reported by Reuters. Trump told reporters at the White House on Tuesday: "We are negotiating with them right now." He did not elaborate and declined to say where he expected talks to take place.

A source familiar with the situation said Trump's son-in-law, Jared Kushner, was due to take part in the talks, along with U.S. Special Envoy Steve Witkoff and Iranian Foreign Minister Abbas Araqchi.

Ministers from several other countries in the region including Pakistan, Saudi Arabia, Qatar, Egypt, and the United Arab Emirates had also been expected to attend, but the regional source told Reuters that Tehran wanted only bilateral talks with the U.S.

In June, the United States struck Iranian nuclear targets, joining in at the close of a 12-day Israeli bombing campaign. More recently, the U.S. navy built up forces in the region following Iran's violent crackdown against anti-government demonstrations last month, the deadliest since Iran's 1979 revolution.

Trump, who stopped short of carrying out threats to intervene, has since demanded nuclear concessions from Iran, sending a flotilla to its coast.

Iran's leadership is increasingly worried a U.S. strike could break its grip on power by driving an already enraged public back onto the streets, according to six current and former Iranian officials.

The priority of the diplomatic effort is to avoid conflict and de-escalate tension, a regional official told Reuters earlier.

Iranian sources told Reuters last week that Trump had demanded three conditions for the resumption of talks: zero enrichment of uranium in Iran, limits on Tehran's ballistic missile program, and an end to its support for regional proxies.

Iran has long said all three demands are unacceptable infringements of its sovereignty, but two Iranian officials told Reuters its clerical rulers saw the ballistic missile program, rather than uranium enrichment, as the bigger obstacle.

Since the U.S. strikes in June, Tehran has said its uranium enrichment work — which it says is for peaceful, not military purposes — has stopped. In another incident on Tuesday, this one in the Strait of Hormuz, the U.S. Central Command said Iran's Islamic Revolutionary Guard Corps forces had approached a U.S.-flagged tanker at speed and threatened to board and seize it.

Maritime risk management group Vanguard said the Iranian boats ordered the tanker to stop its engine and prepare to be boarded. Instead, the tanker sped up and continued its voyage.