US and Iran Move Toward Short-Term Deal to End Fighting

A fragile opening is taking shape in the conflict between the United States and Iran, with sources and officials saying the two sides are moving toward a limited, temporary accord that would halt the war while postponing the hardest disputes.

Rather than a full peace settlement, the plan now taking shape is built around a short-term memorandum, highlighting how far apart Tehran and Washington remain and suggesting that any deal reached for now would serve only as a stopgap.

Even the prospect of a partial breakthrough has stirred financial markets. Expectations that the Strait of Hormuz could reopen have helped push global stocks toward record highs, while oil prices have extended sharp declines on hopes that supply interruptions may ease.

Both capitals have lowered expectations for a grand bargain as major disagreements endure, above all over Iran’s nuclear programme – including what happens to its highly enriched uranium stockpiles and how long Tehran would pause nuclear activity.

“Our priority is that they announce a permanent end to war and the rest of the issues could be thrashed out once they get back to direct talks,” a senior Pakistani official involved in mediation between the two sides told Reuters.

According to the sources and officials, the proposed framework would proceed in three phases: a formal end to the war, steps to resolve the crisis in the Strait of Hormuz and the start of a 30-day period for talks on a broader accord.

A Pakistani source and another source briefed on the mediation said a one-page memorandum formally ending the conflict was close, although differences between the sides have not been bridged.

Trump optimistic, Iran sceptical

US President Donald Trump, who has repeatedly highlighted the possibility of a breakthrough since the war began on 28 February with US-Israeli strikes on Iran, projected confidence.

“They want to make a deal… it’s very possible,” he told reporters at the White House yesterday, before later adding that “it’ll be over quickly”.

The proposal would officially bring to a close the conflict, in which large-scale fighting was paused by a ceasefire announced on 7 April. But the sources said it does not settle core US demands, including that Iran suspend its nuclear programme and reopen the Strait of Hormuz.

Israel, which has also been battling Iran-backed Hezbollah in Lebanon, said it killed a Hezbollah commander in an airstrike on Beirut a day earlier, marking the first Israeli strike on the Lebanese capital since a ceasefire there was agreed last month.

Hezbollah entered its latest war with Israel by opening fire in support of Iran on 2 March. Ending Israeli strikes in Lebanon is also a central Iranian demand in Tehran’s negotiations with Washington, and officials in Iran signalled little enthusiasm for the US plan to wind down the wider conflict.

A foreign ministry spokesperson said Tehran would respond in due course, while politician Ebrahim Rezaei dismissed the proposal as “more of an American wish-list than a reality”.

Iran’s parliament speaker Mohammad Baqer Qalibaf appeared to ridicule reports suggesting the two sides were nearing an agreement, writing on social media that “Operation Trust Me Bro failed” and casting the negotiations as US spin after Washington failed to reopen the strait.

Deal hopes drive oil down, shares rise

News of a possible deal knocked global oil prices down by roughly 11% yesterday, with benchmark Brent crude trading at about $98 a barrel today.

World share markets advanced as well, while bond yields moved lower, as investors responded to hopes that a war disrupting energy flows could be heading toward an end.

“The contents of the US-Iran peace proposals are thin, but there is an expectation in the market that further military action will not take place,” said Takamasa Ikeda, a senior portfolio manager at GCI Asset Management.

Military, regional tensions

On Tuesday, Mr Trump paused a naval mission that was only two days old and had been aimed at reopening the blocked strait, saying negotiations were making headway.

NBC News, citing two unnamed US officials, reported that Mr Trump took that step after Saudi Arabia suspended the US military’s ability to use a Saudi base for the operation.

According to NBC, Saudi officials were caught off guard and angered by Mr Trump’s announcement that the United States would help escort ships through the strait, prompting them to tell Washington they would not allow US military aircraft to fly from a Saudi base or through Saudi airspace.

The White House did not immediately respond to a request for comment on the report.

The US military has meanwhile maintained its own blockade on Iranian ships in the region. US Central Command said forces fired at an unladen Iranian-flagged oil tanker yesterday, disabling the vessel as it tried to sail toward an Iranian port.

Key demands left out

The source briefed on the mediation said Mr Trump’s envoy Steve Witkoff and son-in-law Jared Kushner were leading the US side in the negotiations. If both sides sign off on the preliminary deal, it would trigger 30 days of intensive talks aimed at producing a full agreement.

The sources said the memorandum omitted several longstanding US demands that Iran has rejected, including curbs on Iran’s missile programme and an end to its backing for proxy militias in the Middle East, including Hezbollah.

The sources also said there was no mention of Iran’s existing stockpile of more than 400kg of near-weapons-grade uranium – one of Washington’s main concerns.