Diaz doesn't want a rematch. He wants money and he wants to GTFO. He already beat McGregor decisively.
He has a number that it is worth for him to rematch Conor. They're not willing to meet that number.
If you're really not just trying to be cheap, call his bluff and move on. But they haven't, so, obviously they (UFC & Conor) want this fight, and this is simply negotiating through the media. I mean, shit, after all Conor did with whole retirement BS, I thought it was pretty obvious that they're dragging Diaz through the mud and trying to somehow make him the heel out of the three.
Tell Diaz that the rematch is off and he's going to have to fight someone else, or tell Conor that he lost, and he's going to have to defend the belt before a rematch. Diaz & his mgmt knows they're bluffing, and they're publicly calling all of them out. He's pissed that he hasn't been getting paid up to this point, and now that he has money, he's been very vocal about how little leverage that the UFC has in his decisions. He considered the pay he got last fight as "reimbursement" for his last 20 fights. Now, he wants his pay day.