United States and Iran are moving closer to a limited short term agreement aimed at ending months of fighting, according to officials and sources familiar with ongoing mediation efforts.
Rather than pursuing a comprehensive peace agreement, both sides are reportedly focusing on a temporary memorandum that would formally halt hostilities while leaving several major disputes unresolved.
The proposed framework reflects the deep mistrust and significant differences that continue to divide Washington and Tehran, particularly over Iran’s nuclear programme and regional influence.
Proposed Deal Focuses on Ending Immediate Conflict
Sources involved in mediation said the emerging arrangement would unfold in three stages.
The first phase would involve a formal declaration ending the war. The second would focus on easing tensions surrounding the Strait of Hormuz and restoring shipping through the strategic waterway. The final stage would launch a thirty day negotiation period aimed at pursuing a broader agreement.
A senior Pakistani official involved in the mediation said the immediate priority is securing a permanent halt to fighting before attempting to resolve more difficult issues through direct negotiations.
The memorandum under discussion is reportedly limited to one page and is being treated as an interim framework rather than a lasting settlement.
Trump Signals Optimism While Iran Remains Cautious
Donald Trump expressed confidence that an agreement could be reached soon, telling reporters that talks had progressed positively and suggesting the conflict could end quickly.
However, Iranian officials reacted with greater caution.
A spokesperson for Iran’s foreign ministry said Tehran would formally respond in due course, while Iranian lawmaker Ebrahim Rezaei dismissed the proposal as unrealistic and overly favourable to American interests.
Iranian parliament speaker Mohammad Baqer Qalibaf also mocked reports suggesting a breakthrough was near, accusing the United States of trying to shape public perception after failing to reopen the Strait of Hormuz through military pressure.
Markets Rally on Hopes of Reduced Tensions
Global financial markets reacted strongly to reports of possible diplomatic progress.
Oil prices fell sharply amid expectations that shipping disruptions in the Gulf may soon ease. Benchmark Brent crude dropped to two week lows before stabilising near one hundred dollars per barrel.
Asian stock markets climbed close to record highs while bond yields declined as investors anticipated reduced geopolitical risk and improved energy supply stability.
Analysts said market optimism was driven more by hopes that military escalation could be avoided rather than by confidence in the actual contents of the proposed deal.
Strait of Hormuz Remains Central to Negotiations
The Strait of Hormuz continues to play a critical role in the conflict and negotiations.
Before the war began in February, the narrow waterway handled roughly one fifth of global oil and gas shipments, making any disruption highly significant for the world economy.
Trump recently paused a naval mission intended to reopen the blockaded strait, citing progress in diplomacy.
Reports later suggested that Saudi Arabia opposed the military operation and restricted American access to Saudi bases and airspace linked to the mission.
At the same time, the United States has maintained pressure on Iranian shipping, and American forces reportedly disabled an Iranian flagged tanker attempting to move toward an Iranian port.
Key Nuclear and Regional Issues Remain Unresolved
Despite progress toward a temporary arrangement, the most difficult disputes between the two countries remain unresolved.
Sources said the memorandum does not include several longstanding American demands, including restrictions on Iran’s missile programme and limits on Tehran’s support for allied armed groups across the Middle East.
The proposal also reportedly avoids direct discussion of Iran’s stockpile of highly enriched uranium, which remains one of Washington’s biggest concerns.
Negotiators led by Trump envoy Steve Witkoff and presidential adviser Jared Kushner are expected to continue working toward a more comprehensive framework if the initial memorandum is approved.
Analysis
The movement toward a temporary agreement reflects growing recognition in both Washington and Tehran that neither side currently appears capable of achieving a decisive outcome through military pressure alone.
For the United States, stabilising energy markets and preventing broader regional escalation have become immediate priorities. For Iran, easing economic and military pressure while avoiding further confrontation appears increasingly important.
However, the proposed memorandum leaves unresolved the very issues that have fuelled tensions for years, including Iran’s nuclear ambitions, missile capabilities, and regional alliances.
As a result, even if a temporary truce is reached, the underlying conflict between the two countries is likely to remain unresolved, leaving the possibility of renewed tensions in the future.
With information from Reuters.
