For the first time in a long period, both the United States and Iran say they are approaching agreement on the terms of an initial deal, although points of disagreement remain. Officials involved in the talks say a new draft memorandum is being discussed and could soon be approved by both sides, but each side has different versions of it.
What is already becoming clear is that any agreement would serve as a preliminary framework paving the way for more substantive negotiations that are likely to be more difficult and prolonged, lasting at least 60 days during which both sides would commit not to attack each other. The goal is to determine the future of Iran’s nuclear program, lift U.S. sanctions on the country and formally end the war.
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For the first time in a long period, both the United States and Iran say they are approaching agreement on the terms of an initial deal
(Photo: Anna Moneymaker / AFP, Stringer / Getty Images)
In recent days there have been brief exchanges of fire between U.S. and Iranian forces, increasing pressure on negotiators to reach an agreement. Diplomats involved in the talks told the New York Times that the longer the negotiations continue, the greater the frustration on both sides could become, and the more likely the clashes are to escalate, further endangering the broader diplomatic effort.
An Iranian official, American officials and two diplomats involved in the talks tried to outline the draft to the New York Times, as well as the chances of it being implemented. Their accounts suggest the picture remains complex, with both sides interpreting parts of the agreement differently. Still, it is already clear that frozen Iranian assets would be gradually unfrozen from the early stages of the deal, and that an international investment fund in Iran worth hundreds of billions could be established if a final nuclear agreement is reached.
End of hostilities, but for how long?
The agreement is expected to set terms for a non-aggression framework between Washington and Tehran. Mediators say it is likely to include a regional component, which Iranian officials and one diplomat said would also involve a halt to fighting in Lebanon.
However, the New York Times noted ongoing uncertainty: because negotiations have been conducted via Pakistan and Qatar, it has never been clear whether the Americans and Iranians were working from the same version of the memorandum, or who exactly has authority on the Iranian side to signal agreement.
Two diplomats briefed on the latest terms said the initial deal outlines a cessation of hostilities for an initial 60-day period, allowing negotiations between both sides, with the possibility of extension. However, the draft version described by the Iranian official states that the terms include a “declaration of an end to the war” across all fronts, including Lebanon, for the duration of the talks. Iranian officials said the memorandum’s terms apply only to the negotiation period toward a broader, more permanent agreement.
The Strait of Hormuz remains a key point of dispute
The agreement is expected to allow a period of free navigation through the Strait of Hormuz, a vital shipping route through which about one-fifth of global oil and gas consumption passed before the war. Iran effectively closed the strait shortly after the start of the U.S.-Israeli operation in February, shaking the global economy. In response, the United States imposed its own naval blockade on Iranian ports and energy facilities in the Persian Gulf.
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The agreement is expected to allow a period of free navigation through the Strait of Hormuz
(Photo: Stringer/Reuters)
Under the American understanding of the new memorandum, the strait would reopen immediately, while the U.S. blockade would remain in place and be gradually reduced in line with shipping activity as it increases and returns to prewar levels. The idea is to incentivize Iran to quickly clear mines from the strait.
A diplomat briefed on the latest framework said Iran agreed to allow maritime traffic to return to prewar levels for 30 days while both sides negotiate a final deal. Despite this, the demining and reopening process could take weeks. According to him, Tehran is still disputing with Washington what will happen afterward.
The Iranian official said the agreement would include lifting the U.S. naval blockade within 30 days and reopening the Strait of Hormuz during the talks. The United States has not set a timeline, a U.S. official said. Mediators say the Iranian negotiating team insists that Iran and Oman, which borders the strait, have the right to determine whether to impose some form of transit fee on passing vessels after that period.
On Wednesday, President Trump reiterated his position that the international waterway should ultimately remain open to all without any fees or charges. One diplomat said that due to the impasse, some U.S. negotiators suggested that the long-term status of the strait be deferred to a second round of talks.
“Postwar investment fund” for Iran
The most surprising addition to the agreement, and likely the most recent, is the reference to an investment fund for Iran. The Iranian official and one diplomat estimated it at 300 billion dollars, although other mediators did not confirm the figure. The Iranian official described it as a “reconstruction plan” that would be guaranteed to Iran if a final deal is signed.
Earlier in the negotiations, Tehran demanded compensation for damages from the bombings, which some Iranian officials estimate at 300 billion dollars to 1 trillion dollars.
Two diplomats briefed on the latest draft called it an international “investment fund” that the United States would help promote in the event of a final agreement. Plans for such a fund would be discussed later during the negotiation period, they said.
The proposal appears to be a version of an earlier idea raised by Trump’s Middle East envoy Steve Witkoff and the president’s son-in-law Jared Kushner. Both are real estate investors, and some mediators said they proposed advancing real estate projects in Tehran and an investment fund if a deal is reached.
Senior Iranian officials said they proposed to U.S. negotiators that American companies, including major oil and energy corporations, be allowed to enter Iran for investments and joint ventures.
Iran may gain access to billions
Three sources familiar with the details said the framework agreement is expected to allow the gradual release of some of Iran’s frozen funds, although what is written on paper may not match what the two sides agree verbally.
Iran has an estimated 24 billion dollars in frozen assets held in foreign banks and insists that meaningful negotiations cannot begin without their release. The issue is politically sensitive for Trump due to his past criticism of former President Barack Obama, after his administration transferred 1.7 billion dollars to Iran in exchange for the release of four American detainees—an episode critics called the “cash pallets” controversy. Trump also attacked Obama over cash transfers made as part of resolving a decades-long financial dispute following the 2015 nuclear deal.
Approval of the release of far larger sums than under Obama could expose Trump to criticism from both his opponents and Iran hawks. He has made it clear to aides that he will not sign any deal that could be described as the United States making direct cash payments to Iran.
Given this political reality, Trump’s team is developing ideas involving third countries, including Qatar, to facilitate the release of funds to Iran. The Iranian official and two diplomats said a written version of the draft is expected to commit to a gradual release of funds. Iran has said it wants access to up to 20 billion dollars in frozen assets in the Middle East.
Nuclear talks to be postponed
The draft agreement, both the Iranian official and two diplomats said, includes a commitment that both sides will discuss the fate of Iran’s enriched uranium. These talks would take place during a second phase of negotiations and would address ways to dispose of Iran’s stockpile, which includes about 440 kg of uranium that could be quickly enriched to weapons-grade level. There are also about ten tons of material enriched to lower levels that negotiators would need to address.
Trump initially said the stockpiles should be sent to the United States, while Iran wants to dilute part of the enriched uranium on its own soil under international supervision and send other parts to a third country. Trump signaled some flexibility in a social media post this week, saying that dilution under international inspectors or transfer to a third country would also be acceptable. However, on Wednesday he said he was not comfortable with Russia or China taking it.
According to the Iranian official’s description of the draft, Iran would suspend its nuclear program in exchange for a U.S. commitment not to increase sanctions while both sides negotiate a final deal. The official said existing U.S. sanctions on Iran—imposed mainly over its nuclear program—would be lifted over time if a final agreement is reached.