The US and Iran have announced a memorandum of understanding outlining a framework for an immediate ceasefire and a phased roadmap to end the war that began in February.
With a formal signing expected this week, US President Donald Trump said he had authorised the immediate reopening of the Strait of Hormuz.
Iranian state media reported that a US naval blockade on Iranian ports would be lifted from Monday.
Tehran’s commitments under the deal are set to begin after Friday’s signing. Oil prices fell about 5 per cent as concerns over global energy supplies eased.
The announcement has been widely interpreted as the first concrete de-escalation step after months of fraught backchannel diplomacy. The memorandum remains a framework rather than a final agreement, with key issues still unresolved.
The conflict began on February 28 with US and Israeli strikes on Iran's nuclear, missile and military infrastructure. Iran’s supreme leader, Ayatollah Ali Khamenei, was killed in the opening wave along with senior commanders.
The war killed thousands, drew in Iran-aligned groups across the region and cost the US an estimated $30 billion, without achieving regime change. The fighting also disrupted key Gulf shipping lanes and sparked volatility in global energy markets.
The breakthrough was announced first by Pakistani Prime Minister Shehbaz Sharif, who said both sides had agreed to the “immediate and permanent” termination of military operations on all fronts, including Lebanon.
Pakistan and Qatar were credited as the main mediators, with support from Turkey and Egypt. Further technical talks are scheduled before the agreement is formally signed in Geneva on Friday.
Under the framework, the Strait of Hormuz is expected to return to pre-war shipping levels within about 30 days, following mine-clearance and maritime co-ordination.
The deal reportedly includes 14 points covering sanctions relief, partial unfreezing of Iranian assets and a commitment to non-interference. About $24 billion in frozen Iranian funds could be released, with Tehran initially seeking roughly half that amount.
The economic package is intended to encourage compliance during the fragile early stages of implementation.
A 60-day follow-up track is expected to address Iran’s nuclear programme, sanctions, UN resolutions and outstanding issues with the International Atomic Energy Agency.
Both sides have referred to a pledge by Iran not to pursue nuclear weapons, although details remain vague. Notably absent from the framework are Iran's missile programme and its regional alliances, leaving major strategic issues unresolved despite the headline ceasefire.
Hardliner criticism
In Tehran, President Masoud Pezeshkian rejected hardline criticism of the Iranian negotiating team, saying officials working under state mandate should not be labelled as traitors.
He warned that undermining negotiators was not in the national interest, in an apparent defence of Parliament Speaker Mohammad Bagher Ghalibaf and Foreign Minister Abbas Araghchi. His remarks underscore growing tension between pragmatic and hardline factions in Iran, where protests have erupted against perceived concessions.
In Washington, Republican Senator Lindsey Graham said any final nuclear agreement would require congressional review.
He welcomed the moves toward reopening the Strait of Hormuz but warned that Iran’s interpretation of the deal appeared to differ from that of US negotiators. He also said Congress would closely scrutinise any final agreement. The comments reflect growing concern among US legislators over the substance and enforceability of any eventual deal.
Pakistan welcomed the understanding, calling it a “significant breakthrough” reflecting sustained diplomatic engagement and thanking regional and international partners for their role in facilitating talks. Islamabad has increasingly positioned itself as a key intermediary between Tehran and Washington.
Israel has sharply rejected the framework.
Far-right National Security Minister Itamar Ben-Gvir said Israel was not bound by the agreement and referred to negative past experiences of accepting external pressure. "Israel is not subordinate to the United States and we are an independent and sovereign state," Mr Ben-Gvir wrote on X.
Israel sidelined
Defence Minister Israel Katz said Israeli forces would not withdraw from southern Lebanon, Syria or Gaza, describing those areas as “security zones” that would be held indefinitely. He also warned that Israel would strike Iran “with full force” if attacked. Israeli officials made clear that the country’s operational policies would remain independent of the US-Iran agreement.
Kuwait, which along with Bahrain bore the brunt of recent Iranian missile and drone attacks across the Gulf, welcomed the memorandum, saying it could strengthen regional security and help safeguard freedom of navigation through the Strait of Hormuz.
China also expressed support, urging rapid restoration of safe passage through the waterway.
German Foreign Minister Johann Wadephul urged all parties not to let the current opening for diplomacy slip away, saying the moment offered a rare chance to ease tension and advance a political solution. "This is an opportunity for the entire region, and we should seize it together," he said.
The ceasefire framework comes amid continued regional volatility. Israeli strikes on Beirut on Sunday following cross-border fire involving Hezbollah raised concerns that spoilers could seek to derail the agreement before Friday’s signing.
Officials in Tehran had suggested that Iran would retaliate against Israel for its attack on the Lebanese capital, but that has yet to materialise.
Critics said the strike aimed to undermine the deal. Iran’s top negotiator, Mr Ghalibaf, said it showed the US lacked “the will and ability to fulfil your commitments”.
Analysts warn that the memorandum should be viewed as a framework for further negotiations rather than a final settlement.
Iran has emerged militarily weakened but strategically intact, having maintained regime stability under sustained attack while retaining leverage through its ability to threaten shipping in the Strait of Hormuz.
The US, meanwhile, has ended a costly conflict without achieving regime change, instead shifting toward diplomacy amid growing domestic political pressure.
Early assessments suggest both sides are likely to present the agreement as a victory, despite the significant issues left unresolved.
The durability of the arrangement will depend on whether follow-up negotiations produce enforceable limits on Iran’s nuclear programme and regional activities, or whether the current pause merely postpones another cycle of confrontation.
For now, much depends on implementation details that remain under negotiation and on whether both sides can translate a fragile framework into a lasting settlement.
