The United States and the Islamic Republic of Iran have formally concluded a memorandum of understanding (MoU) to end their four month war, marking the most concrete diplomatic breakthrough since hostilities erupted on February 28. President Donald Trump personally signed a copy of the agreement during a dinner with French President Emmanuel Macron at the Palace of Versailles following the G7 summit, with a photograph of the signed document subsequently transmitted to Iranian officials and the mediating countries.
The agreement was executed electronically on Wednesday, June 17, and is now officially in effect. Iran’s Foreign Ministry spokesman Esmaeil Baghaei confirmed that Tehran has endorsed the memorandum, while Iran’s Deputy Foreign Minister Majid Takht Ravanchi announced that the United States has lifted its two-month naval blockade of Iranian ports ahead of the formal signing. The MoU is expected to be ceremonially signed in Switzerland on Friday, but its key provisions are already being implemented.
The Framework
The MoU establishes a 60-day negotiation period, which can be extended by mutual consent, during which the parties will seek to resolve the most contentious issues that have defied resolution for decades. According to a 14-point draft memorandum released by Bloomberg News, the agreement covers the reopening of the Strait of Hormuz, sanctions relief, an economic rehabilitation plan for Iran with financing of at least $300 billion, and Tehran's pledge to never pursue nuclear weapons. The Strait of Hormuz is scheduled to reopen upon the signing of the document, with Iran using its best efforts to ensure safe passage for commercial vessels without charge for 60 days. However, Iran intends to levy fees on crossing vessels for security, maritime, environmental and insurance services after this initial period, channeling the revenues toward economic development. The United States, by contrast, expects the waterway to remain open to toll-free transit in the long term.
On the nuclear front, Iran has reiterated its past commitment to never acquire or procure a nuclear weapon. The fate of enriched material and other nuclear-related issues will be addressed in a final agreement, but the draft document leaves the nuclear issue largely to future negotiations. Vice President JD Vance has stated that the US and UN nuclear inspectors will be allowed to enter Iran, and that the US and the International Atomic Energy Agency will help Iran destroy its highly enriched stockpile. However, the memorandum does not explicitly address whether Iran gets to keep its ballistic missiles, and the country would be allowed to have a nuclear program for civilian purposes. President Trump has defended this position, arguing that it is "common sense" for Iran to have a nuclear program for electricity generation, given that neighbouring states possess such capabilities. He has also stated that Iran will "have to have some" ballistic missiles because other countries have them.
A Fractured Response
The agreement has elicited sharply divided reactions, reflecting the deep geopolitical fault lines that the war has exposed. Saudi Arabia welcomed the agreement, expressing hope "for achieving peace in a manner that enhances the security of the region and the world through a lasting agreement that takes into account the security interests of regional countries". The United Arab Emirates called for full implementation of the preliminary deal, including an immediate halt to hostilities and guarantees of freedom of navigation in the Strait of Hormuz. The Gulf Cooperation Council and the Arab Parliament also welcomed the agreement, describing it as a positive step toward reducing tensions and strengthening regional security.
In Israel, however, the reaction has been one of profound alarm and anger. Israelis from across the political spectrum have reacted angrily to the news of an initial deal between the US and Iran, calling it a disaster for Israel and directing their fury at Prime Minister Benjamin Netanyahu. National Security Minister Itamar Ben-Gvir has already dismissed the agreement, saying Israel is "not bound" by it. Israeli media has reported that Netanyahu has made it clear Israel "does not consider itself committed to the Lebanese clause" in the agreement. Israel’s request to review the US-Iran MoU has been declined, meaning that Israel still does not know the full terms of the deal. Israeli analysts and media have urged continued strikes on Lebanon to disrupt the implementation of the MoU. The Israeli government’s absence in the negotiations leading up to the MoU has become a perilous diplomatic liability.
Trump, for his part, has lashed out at his critics, calling them "stupid" and arguing that prolonging the war could lead to an "international depression". He has warned that if a final agreement is not reached within 60 days, "we go back to bombing". However, he has also made plain his desire to wrap up the fighting, acknowledging that the bombing runs did not loosen Iran’s grip on the Strait of Hormuz.
Who Does the Deal Favour?
Based on past circumstances, statements, and the terms of the agreement itself, the MoU appears to favour Iran significantly more than the United States. When the war began on February 28, President Trump laid out a host of objectives, from destroying Iran's ballistic missile capabilities to ensuring Tehran can never have a nuclear weapon. The MoU achieves none of these objectives. Iran is allowed to retain a nuclear program for civilian purposes, it will keep some ballistic missiles, and the most difficult issues, including the fate of its enriched uranium stockpile have been deferred to future negotiations. The United States has lifted its naval blockade of Iranian ports, sanctions on Iranian oil exports are being lifted, and Iran is set to receive at least $300 billion in reconstruction funds. Iran’s Foreign Ministry has already declared victory.
Trump’s own statements have confirmed the extent of the retreat. He has conceded that Iran will "have to have some" ballistic missiles and that it is "common sense" for Iran to have a nuclear program. He has acknowledged that the US lacks "the stomach" for greater action and that further bombing risked destroying the global economy.