US-Iran ‘deal’ marks breakthrough, but West Asia peace hangs by a thread

Despite a major military escalation since the initial April ceasefire, unprecedented diplomatic momentum over the past week has led to a breakthrough. Early this morning, President Donald Trump and Iran’s Supreme National Security Council confirmed they have finalised a Memorandum of Understanding (MoU) to halt the war on all fronts, including Lebanon, with the formal signing set for this Friday.

The fragile two-month ceasefire nearly collapsed following the downing of an American Apache helicopter last Monday, an incident Iran attributed to an accident. Since then, the US and Iran have traded heavy missile and drone strikes. In a significant departure from its position since the April 8 ceasefire, when it allowed vessels going to friendly states to transit, Iran announced that it would no longer permit any maritime traffic across the Strait of Hormuz and that any vessel attempting to cross the strait will be targeted. Since then, maritime traffic through the Strait has been in a state of extreme disruption and near-total operational paralysis.

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Following continuous attacks on each other on last Tuesday and Wednesday, US President Donald Trump threatened to seize Kharg Island to assume total control of Iran’s energy infrastructure. While taking the island would paralyse 90 per cent of Iranian oil exports, a ground assault within range of Tehran's coastal missiles risks severe American casualties. Further, such a move would trigger a massive escalation and lead to the permanent collapse of the current ceasefire. It was therefore not surprising that Trump subsequently reversed his decision, citing that the American public will not be willing to bear the heavy costs and casualties associated with the attack.

Despite the intensifying hostilities, mediation continued. A Qatari delegation visited Tehran this week and achieved a breakthrough in finalising the MoU, under which the peace deal is structured into two phases. The first phase, after concluding the MoU, will initiate a 30-day window for Iran to reopen the Strait of Hormuz concurrently with the US lifting its naval blockade. In parallel, within a 60-day period, both sides are to conclude an agreement on Iran’s nuclear programme and the lifting of US sanctions.

Iran’s Foreign Minister Abbas Aragchi characterised the MoU as a historic victory that secures a multi-front ceasefire—including an Israeli withdrawal from Lebanon, the lifting of the U.S. naval blockade, and the release of frozen assets—while establishing a historic precedent where the United States explicitly recognises Iranian sovereignty in writing for the first time in 47 years.

However, it will be interesting to see how the twin issues of a ceasefire in Lebanon and the release of frozen assets—both of which are critically important to Iran and insisted upon for concluding the agreement—are addressed in the MoU.

In Lebanon, while the Israel Defence Forces (IDF) had paused their advance and halted new attacks on Beirut for a few days following President Trump’s phone call to Prime Minister Netanyahu on Monday, the IDF resumed airstrikes yesterday on a Hezbollah stronghold in South Beirut. President Trump sharply criticised the operation, characterising it as an unnecessary escalation over a "meaningless" cross-border attack. He demanded that Israel cease its operations in Lebanon while simultaneously calling on Hezbollah to halt all attacks against Israel, warning both sides not to disrupt the pending US-Iran peace deal.

Releasing frozen assets to Iran will pose a more difficult political challenge for Trump. Republican lawmakers have long condemned the Obama administration's 2015 nuclear deal (JCPOA) for allowing the release of $1.7 billion to Tehran—which was paid to settle a dispute over military equipment purchased before the 1979 Iran revolution.

In addition to reopening the Strait of Hormuz, Trump’s top priority is ensuring that Iran never acquires nuclear weapons, and the MoU is expected to include strong language to this effect. But the profound shift in Iran’s diplomatic posture is striking. In the negotiations preceding both Operation Thunderstorm last June and Operation Epic Fury this February, Tehran appeared amenable to offering significant nuclear concessions. However, since the present ceasefire took effect in April, it has considerably hardened its stance, insisting on a two-step process that the US has now accepted. Interestingly, during the same period, the US—alongside dropping its insistence on zero enrichment—appears to have removed other long-standing priorities from its current diplomatic discourse, such as the dismantling of Iran’s missile programme and the cessation of its support for Middle Eastern proxies.

Thus, what the US is achieving through the MoU is merely a resolution of issues that did not exist before February 28, when the US and Israel launched joint attacks on Iran. As for Iran, it has succeeded in making the threat to the global economy an integral part of its deterrence doctrine, in addition to securing strategic gains in Lebanon by curtailing Netanyahu’s ability to attack Hezbollah at will.

Israel is deeply dissatisfied with the proposed MoU, arguing that it leaves the war's core objectives completely unresolved. Specifically, the framework fails to demand zero uranium enrichment, constrict Iran's ballistic missile programme, halt its backing of regional proxies, or prevent its ongoing export of global terrorism. Instead of fostering the conditions necessary for regime collapse, the deal grants Iran the breathing room to rebuild rather than face defeat. Furthermore, Israeli leadership fears the agreement will ultimately tie the IDF's hands, severely restricting Israel's capacity to preemptively thwart Hezbollah in Lebanon.

While the MoU should be concluded this Friday, the more difficult task will be the negotiations on the final agreement regarding the nuclear issue, sanctions relief, war reparations, and Iran's insistence on exercising some control, along with Oman, over maritime traffic through the Strait of Hormuz. The situation will also be complicated by the impending elections in Israel, where Netanyahu is once again a leading candidate. To appeal to his base, he may feel compelled to continue military actions against Hezbollah in Lebanon as he did yesterday, which has the potential to derail the entire peace deal.

Reopening the Strait of Hormuz under the new MoU is a clear win for the global economy, but the relief may be short-lived. If history repeats itself, Washington's diplomatic focus could quickly wane, much like it did after the Gaza ceasefire. Without sustained engagement, regional instability will fester beneath the surface. To insulate themselves from future crises, Gulf nations will likely fast-track alternative pipelines to bypass the Hormuz bottleneck, while major energy consumers like us will have to continue to diversify supply lines.

(The author is a former Governor of India to the International Atomic Energy Agency (IAEA) in Vienna, as well as a former Ambassador to Egypt and former Permanent Representative to the Arab League. The views expressed in this piece are personal and solely those of the author. They do not necessarily reflect Firstpost’s views.)