As Iran-US deal nears reality, what challenges lie ahead?

The United States and Iran appear closer than at any point since the outbreak of hostilities in February to reaching an agreement.

The conflict has fundamentally disrupted energy markets and tested Washington's relationships with its regional allies in West Asia.

Officials on both sides have indicated that a memorandum of understanding is almost there. According to a senior US administration official, a draft text has been agreed upon and Washington expects an initial arrangement to be formalised within days.

Iranian Foreign Minister Abbas Araqchi has also signalled progress, although he suggested that changes remain possible before any final announcement.

Yet the apparent breakthrough comes with major unresolved questions. The proposed framework touches on issues ranging from sanctions relief and access to frozen Iranian assets to the future of Tehran's nuclear programme and the reopening of the Strait of Hormuz.

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How close are Washington and Tehran to an agreement?

A senior US administration official told Reuters that both sides had settled on a text and described discussions as being in a "very, very good place." Iranian officials similarly acknowledged that a preliminary understanding had emerged.

Speaking on Iranian state television, Araqchi sought to portray the outcome as beneficial for Tehran. "Iran is the winner of the war with the US," he said.

Western diplomatic sources have indicated that Geneva is being considered as a possible location and suggested that US Vice President JD Vance and Iranian Parliament Speaker Mohammad Baqer Qalibaf could participate.

American officials have acknowledged that Europe has been discussed as a venue but insist no final decision has been made. Iran has offered a different version of events. Araqchi said the agreement would be signed remotely before any public announcement.

Despite the optimism, military tensions have not completely subsided. Only hours after the latest diplomatic statements, US forces intercepted multiple Iranian one-way attack drones approaching the Strait of Hormuz.

According to a source familiar with the incident, the drones were considered a threat to commercial shipping. US Central Command later confirmed the operation and stated that maritime transit through the waterway remained open.

Iranian media meanwhile reported explosions near Sirik port and on Qeshm Island. Residents and local authorities reportedly attributed the incidents to warning fire from Iranian forces aimed at vessels attempting to transit the area without authorisation from the Revolutionary Guards' naval branch.

What are the main components of the proposed deal?

According to sources involved in the negotiations, the proposed memorandum centres on two immediate issues, which are reopening the Strait of Hormuz and reducing economic pressure on Iran.

The draft arrangement reportedly envisions the gradual release of billions of dollars in frozen Iranian assets and waivers affecting sanctions on Iranian oil exports. In exchange, Tehran would facilitate the restoration of normal shipping through the Strait of Hormuz.

The waterway has become one of the most important issues in the conflict. Before hostilities disrupted traffic, roughly one-fifth of the world's oil and natural gas moved through the narrow maritime corridor. Restrictions on shipping contributed to higher energy prices and raised concerns about global supply chains.

Araqchi indicated that Iran would continue to exercise significant influence over the route together with Oman. "Our sword will always hang over the Strait of Hormuz," he said.

The agreement reportedly postpones the most contentious issue — Iran's nuclear programme — for a separate negotiation process expected to last 60 days.

According to the US administration, the eventual objective remains the dismantling of Iran's nuclear programme, the removal and destruction of highly enriched uranium and the establishment of a monitoring mechanism designed to verify compliance over an extended period.

Iran, however, appears to favour a different outcome. Sources familiar with the negotiations said Tehran has not accepted dismantling its nuclear programme. Araqchi publicly reiterated Iran's preferred approach.

“For Tehran, the only preferred solution for its highly enriched uranium stockpile is down-blending the material,” he said.

Reports have also suggested that discussions include potential war reparations for Tehran and the removal of longstanding US demands relating to Iran's missile programme. The Trump administration disputes that interpretation.

"None of their money released until they perform. Strait of Hormuz will be open. No Iran funding of terrorist groups," said the US official.

"This is what they have agreed to. This is a performance-based deal."

Did the war achieve Trump's military objectives?

Now the question is whether the conflict accomplished the goals repeatedly outlined by US President Donald Trump and senior administration officials. One of the most frequently cited objectives involved reducing Iran's missile capabilities.

During the early months of the war, Trump asserted that around 90 per cent of Iran's missile inventory and launch infrastructure had been eliminated. By May, however, the estimate offered by the president had changed, with Trump saying 82 per cent of those capabilities had been removed.

Military assessments have suggested that Tehran retains some capacity to continue launching attacks. Admiral Brad Cooper, the senior US military commander overseeing the region, told lawmakers that Iran maintained a limited but continuing strike capability.

Events during the conflict appeared to support that assessment. Iran continued launching attacks, including strikes against Gulf states and drone operations in the region.

Another objective involved damaging Iran's defence production sector. US Central Command said its operations targeted facilities associated with missile production, drone manufacturing and weapons development.

US Secretary of State Marco Rubio later told lawmakers that Iran's defence industrial base had suffered extensive damage and that rebuilding would require years.

Trump offered a similar assessment during a television interview. “Most of the drone factories have been knocked out, most of the launching pads have been knocked out and most of the missile manufacturing areas have been knocked out. But they still have capacity.”

What happened to Iran's navy and air force?

American and Israeli forces rapidly secured control of Iranian airspace and operated with limited interference for much of the conflict. Rubio argued that Iran no longer possesses the ability to launch large-scale coordinated drone attacks similar to those seen during the early stages of the war.

He also downplayed the threat posed by Iran's naval forces, describing them primarily as small vessels equipped for harassment operations and mine deployment rather than a traditional navy.

Yet Iranian military activity continued throughout the conflict. Iran launched attacks against regional targets, including a June 3 operation involving drones and missiles directed at Kuwait that temporarily disrupted activity at the country's principal airport.

Bahrain and the United States also reported intercepting missiles and drones targeting the Gulf kingdom.

Trump also accused Iran of responsibility for the loss of a US Army helicopter near the Strait of Hormuz after it collided with an Iranian drone.

What remains unresolved over the nuclear programme?

Perhaps the most important unresolved issue concerns Iran's nuclear activities. Throughout the conflict, the Trump administration repeatedly described the destruction of Iran's nuclear capabilities as a central objective.

Yet even as negotiations approach a conclusion, disagreements remain over how to handle Tehran's stockpile of highly enriched uranium.

A key focus involves approximately 970 pounds of enriched uranium believed to be located beneath nuclear facilities previously targeted by US and Israeli strikes. Trump stated in late May that the material would be recovered and destroyed through cooperation involving Iran and the International Atomic Energy Agency.

However, Iran has not publicly endorsed that approach. Experts cited in discussions surrounding the negotiations have argued that any attempt to seize the material without Tehran's cooperation would require a significant military deployment and carry considerable risks.

The administration now says there is conceptual agreement regarding the uranium stockpile, but practical arrangements remain under negotiation.

What role do regional allies play now?

Another goal articulated by Trump involved protecting American partners across the conflict-ridden region. The administration specifically referenced countries including Israel, Saudi Arabia, Qatar, the United Arab Emirates, Bahrain and Kuwait.

The war demonstrated the difficulty of that objective. Iran launched attacks against several regional states during the conflict, including Bahrain, Kuwait and Jordan. Those incidents prompted additional American military responses.

Trump has also suggested that any broader settlement should somehow encourage regional participation in the Abraham Accords framework that emerged during his first administration.

However, no details have been provided explaining how that objective might be incorporated into the current agreement.

The administration has reportedly examined whether frozen Iranian assets could be used to compensate Gulf partners for damage sustained during the conflict, although no formal policy decision has been announced.

Officials nevertheless insist that the memorandum is intended to create conditions for long-term regional stability.

Why is Israel a major obstacle to a lasting settlement?

Israeli Prime Minister Benjamin Netanyahu has stated that his government is not participating in the negotiations and will not be a party to the memorandum.

The issue is particularly significant because Iran has linked aspects of the agreement to developments in Lebanon, where Israel continues military operations against Hezbollah.

Araqchi suggested that the proposed arrangement would bring the conflict in Lebanon to an end and result in Israeli withdrawal from occupied areas. Israeli officials rejected that interpretation.

The country's defence minister stated that Israel would not withdraw, while a senior Israeli official said Israel expects to maintain operational freedom against perceived threats.

The disagreement reflects broader tensions that have reportedly emerged between Netanyahu and Trump in recent weeks, particularly regarding Washington's efforts to create conditions for a diplomatic settlement with Tehran.

The Trump administration argues that broader regional provisions within the memorandum could eventually help reduce tensions involving Hezbollah and Israel. Whether that proves achievable remains unclear.

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With inputs from agencies