Ok to answer the question, Is "Allah Negotiating with Iblis", He really Isn't "Negotiating with him" but more so "Allowing his former believing slave and/or former slave his one time Dua to be answered", now the reasons as to why "Allah did that", those are many, but to name a few.
Iblis use to be on Earth prior to the creation of Adam (A.S), and he use to be amongst the best of worshipers on Earth, so much so that "Allah (SWT) granted him entry Into Paradise" and In "Paradise (As there are levels to It), he/Iblis "Worked up the levels In Paradise and was those nearest to Allah" and "he/Iblis was an excellent worshiper/slave" yet In "His heart was a disease that was something that he couldn't A) Cure and B) Didn't mind and the disease was "Self Pride", like "He was legit thinking to himself what anyone would think to themselves If they were legit put Into his spot (Think about It, except for those chosen by Allah such as Prophets), but any normal person would be full of themselves If they got to see Paradise while alive and not having tasted death as of yet, and to be chosen among'st all of "Jinn Kinda on Earth @ the time, and be granted Paradise Is In of Itself a great honor", so this sickness/disease kept on festering and growing day by day minute by minute hour by hour week/month/year over X amount of years (Allah only knows best how many Years Iblis stayed In this Paradise) but Allah (SWT) created the "Mould of Adam (A.S" and "Didn't breath life Into him (Adam A.S)" for like 25 years or so, and we all know that the time of Paradise vs the time on Earth Is greatly different.
From the Quran
" He regulates all affairs from the heaven to the earth. Then they ascend to Him in a day, the measure of which is a thousand years as you count".
(32- The Prostration, 5)
"To Him ascend the angels and the spirit in
a day the measure of which is fifty thousand years".
(70- The Heights, 4)
So as you can see that's a long time now multiple that time by 25 years of It (If not more) and Iblis was seeing this "Being (Adam A.S)", this "Weak Creation, which Allah SWT the Most High was gonna make a Caliphate on the Earth, and that "He the Most High was gonna Honor" and recall that Iblis "Was already full of himself and his accomplishments for achieving such a great deal" I.E being taken from Earth and granted Paradise (While Alive) and being amongst the highest ranked Angels (Even though he was a Jinn) and being amongst those nearest to Allah and "He Iblis was gonna get shat on by this mere creature, this weak/feable thing"? You see so what does "he/Iblis do", remember he's a Jinn, he turned to smoke and went Into the life-less body of the Prophet while In Paradise to see (What's so special about him), and he noticed nothing, and "That's when he thought to himself", "I Am Better than he Is", "I Am Stronger than he Is", "I will over come my fear and be better/stronger/faster and so forth and so on than he/Adam (A.S) Is". So when that fruitful day came the day In which Allah (SWT) order'd all the Angels to Prostrate themselves In Paradise, and they all did so (Without a moments thought btw), all except for Iblis, he was like "A black speck on an all white paper" I.E Pretty damn hard to miss, lol and the only ones there standing were Iblis, the Prophet "Adam (A.S)" and the "Lord Most High (Was Above all of them)", so the "Lord Most High asked Iblis" what Is keeping you from Prostrating oh Iblis" and "he had enough nerve to respond with", "I am better than him (Adam A.S), You created me from fire, and him You created from clay” (Quran, Surah Al-Aaraf: 12). (To Allah SWT), while "Allah SWT" was the one asking him the question
In another sura his response was as follows Allah) said: “O Iblees (Satan)! What is your reason for not being among the prostrators?”
(Iblees (Satan)) said: “I am not the one to prostrate myself to a human being, whom You created from sounding clay of altered black smooth mud” (Quran, Surah al-Hijr:32 – 33)".
As you can see, this cannot be tolerated at all for many MANY reasons. A) Who In the world Is Iblis but a mere creation (Be It one with Powers and Strength and a longer life span than human beings 10 fold that can turn Into smoke and than remake themselves Into a physical form+See us from a distance that we cannot see them and they can be In-front of us and behind us at such a close distance and yet we still can't see them) yet you get my point, Iblis was a mere "Creature created just like the rest of us" by the "Lord Most High Allah (SWT)" so when he/Iblis made that Arrogant comment after the "Lord Most High/Allah (Over looked his first error)" by actually than continuing to ask him the question "Oh Iblis what Is keeping you from prostrating", he/Iblis than complies that error by actually responding with the response "I AM BETTER THAN HIM", lol? Really, yo Iblis (You stupid Idiot), this question wasn't from your "Father/Brother/Cousin/Friend/Lover/Wife/Kid/Co-Worker/Boss" It was from the "Lord of the WORLDs", the "MAKER OF EVERYTHING", the "ONE THAT IS ETERNAL", "THE MOST MERICIFUL" (You get my point), That was his 2nd mistake, so than Allah SWT tells him (After 2 chances), The Lord said: "Then get out of here; you are rejected, and there shall be a curse upon you till the Day of Recompense.", now that could've been the entire end of this ordeal but "Iblis made a "Dua" and his "Dua was as follows", Iblis said: "My Lord! Grant me respite till the Day when they will be resurrected." Now the "Most High didn't have to grant him/Iblis anything and could've punished him right away and done with him" but "The Most Merciful was Just that being The Most Merciful+recall all them years of supplications/worshiping The Most High", so "Allah allowed Iblis's Dua" and Allah said: "For sure you are granted respite until the day of a known time.", Now you think "Allah (The Creator of the Seen and Unseen), "Lord of the Worlds", needs to "Hagle with his own creation and/or Negotiate with HIS own Slave (Ungrateful one), but you get me point". Iblis said: "My Lord! In the manner You led me to error, I will make things on earth seem attractive to them and lead all of them to error, except those of Your servants whom You have singled out for Yourself." to which the "Most High the Ever Lasting Ever Powerful responds to Iblis as such". Allah said: "Here is the path that leads straight to Me. Over My true servants you will be able to exercise no power, your power will be confined to the erring ones, those who choose to follow you. Surely Hell is the promised place for all of them." The Most high chose to respond In this fashion because "He Is our Maker" and "Knows that which will happen to us and that which will come after and He knows every minute Intricate detail of our lives, He knows that which Is behind us, before us, beside us, that which we think, say, conceal, that which we shall do In the span of 100 years prior to It coming to pass (As he knows It)" And as such knew that "Iblis, ALWAYS Thought this way, that He AlWAYS believed to be better than EVERYONE" Even when he/Iblis was on Earth, he/Iblis thought he was the Nutz and In Paradise, he Just became more arrogant but aimed to "Conceal It (Even from Allah), which Is retarded, but he tried none-the-less and "Allah knew All Along", and that's the same thing when Allah stated to him/Ibliss "your power will be confined to the erring ones, those who choose to follow you. Surely Hell is the promised place for all of them.".
I hope this answers your question.