The United States and Iran appear closer than ever to a diplomatic breakthrough that could bring an end to the ongoing conflict. American officials say they are highly confident that an agreement can be reached within days, while Iran's Foreign Minister Abbas Araghchi has declared that a deal has "never been closer".
The proposed arrangement is designed as a two-stage process. The first stage would involve signing a Memorandum of Understanding that establishes an immediate 60-day ceasefire. The second stage would consist of far more difficult negotiations on Iran's nuclear programme, regional security issues and economic sanctions.
The MoU would impose a 60-day ceasefire across all military fronts, ending the cycle of flare-ups that has continued despite the fragile truce announced in April. A key part of the agreement would be the reopening of the Strait of Hormuz. Iran would allow commercial traffic to resume through the waterway, while the United States would lift its naval blockade on Iranian ports.
The agreement also seeks to reduce tensions elsewhere in the region. It envisions an end to active hostilities between Israel and Hezbollah in Lebanon, while Iran would formally reaffirm that it has no intention of developing or acquiring a nuclear weapon.
Officials expect the agreement to be signed either remotely or during a ceremony in Geneva, Switzerland. US Vice President JD Vance and Iranian parliamentary speaker and chief negotiator General Mohammad Bagher Ghalibaf are expected to head their respective delegations.
The ceasefire, however, is only intended as a bridge to more substantive talks. During the 60-day window, Washington hopes to secure commitments that go well beyond a temporary halt in hostilities. The United States wants Iran to dismantle its nuclear programme completely, surrender its stockpile of highly enriched uranium and ensure that the material is removed from the country. It is also pressing Tehran to end financial and military support for regional proxy groups, including Hezbollah.
In exchange, Iran would be offered a gradual path back into the global economy. The package includes meaningful sanctions relief, access to frozen assets, a revival of oil exports and the reconnection of Iranian banks to the international financial system.
The Trump administration has been consistent, however, in its insistence that economic benefits will be tied strictly to performance. Despite reports in parts of the Iranian media, relief from sanctions would come in tranches. Each release would depend on independent confirmation that Iran had fulfilled its obligations under the deal. The transfer of enriched uranium, for instance, could trigger an initial loosening of restrictions, while the decommissioning of nuclear facilities would unlock further economic rewards.
For all the optimism in the air, major hurdles still remain. Perhaps the most technically daunting concerns Iran's nuclear material. Negotiators have not yet found a solution for recovering and disposing of the stockpile of nuclear fuel thought to be buried beneath what remains of the Isfahan nuclear facility, badly damaged in a US bombing campaign last year.
The future of the Strait of Hormuz has also become a serious bone of contention. Although both sides agree that the waterway should reopen, they disagree over how it should operate. Iranian officials have indicated that administration of the strait "will no longer be the same as before". Tehran wants to maintain sovereign control and, potentially in cooperation with Oman, charge commercial vessels a service fee for passage. The United States rejects the idea, arguing that international shipping must continue to enjoy free and unrestricted access.
Wider regional tensions are complicating matters further. Iran is pushing for a complete Israeli pullout from Lebanese territory as a condition of any broader peace settlement, a demand that negotiators may find very hard to satisfy.
Even should diplomats find a way through these disagreements, the pressures of domestic politics could present an equally serious test. Decision-making in Iran involves multiple centres of power, including the military, the Islamic Revolutionary Guard Corps, parliament and ultimately the supreme leader. Reaching consensus among them is never straightforward.
There is also a profound lack of trust between the two sides. Many Iranian officials remain sceptical of the Trump administration, pointing to previous military actions undertaken while negotiations were underway. Only days ago, the United States and Iran exchanged strikes over two days, and President Trump publicly threatened Iran's Kharg Island oil export terminal before later backing away from further action.
Meanwhile, the White House must also manage the concerns of its regional allies, particularly Israel. Prime Minister Benjamin Netanyahu has long been sceptical of diplomatic engagement with Tehran and fears that any agreement may fail to impose permanent restrictions on Iran's nuclear ambitions. US officials have sought to address those concerns by highlighting the deal's performance-based design, stressing that Israel would retain its right to act against Hezbollah in the event that Iran reneged on its obligations.
