An Iranian-American woman known for her NGO work in Afghanistan has been arrested in Iran, intensifying diplomatic tensions, a government newspaper reported.

The arrest has prompted the United States to suspend the implementation of a planned prisoner swap deal with Tehran, as reported by Iran's state-run Khorasan newspaper.

The woman's identity has not been disclosed, with sources citing the need to protect ongoing negotiations over her release. This latest arrest follows the detention of a fourth US national in Iran, as previously reported by Semafor news website. The inclusion of this new case has now become a pivotal element in the escalated negotiations between the two nations.

Efforts to secure the release of American citizens held in Iran have been ongoing, with previous detainees including Siamak Namazi, Emad Sharqi, and Morad Tahbaz. The Biden administration has pursued the return of these individuals who have been held on alleged espionage charges that have been widely criticized as lacking credible evidence.

Iran seeks the release of its citizens convicted of crimes in Western countries, while the United States seeks the return of its nationals detained in Iran and access to frozen funds totaling billions of dollars held in overseas banks.

Tensions have escalated further due to Iran's recent arrest of the fourth and now fifth US citizens, disrupting the progress toward a potential agreement. Sources close to the situation indicate that the fourth American detainee was intended to be part of the exchange deal, potentially prompting Iran to adjust its demands.

While Iran maintains that its policy does not involve hostage-taking, human rights organizations have raised concerns about the country's track record of detaining dual nationals and foreigners on questionable grounds. Official figures of Iran's diplomatic hostages are unknown, but it is believed it spans a vast array of countries globally.