The United States and Iran have agreed on a framework for a peace accord aimed at ending months of conflict, lifting the US blockade on Iranian ports, and reopening the Strait of Hormuz, a move that could ease pressure on global energy markets and bring down oil prices.
US President Donald Trump announced the breakthrough on Sunday, saying the agreement had been finalised.
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"The Deal with the Islamic Republic of Iran is now complete," Trump wrote on his Truth Social platform at about 5:30 p.m. ET (2130 GMT).
His statement came shortly after Pakistan Prime Minister Shehbaz Sharif, who has played a mediating role in the negotiations, said an agreement had been reached. Sharif added that the pact is expected to be formally signed in Switzerland on Friday.
Details of the agreement were not immediately released. However, Sharif said in a post on X that it included "the immediate and permanent termination of military operations on all fronts, including in Lebanon."
Lebanon had emerged as one of the key obstacles in the talks, with continued hostilities between Israel and Hezbollah complicating efforts to secure a broader settlement despite repeated calls for restraint from Washington.
Trump also said the Strait of Hormuz — a vital route for global oil shipments that Iran has effectively closed for months — would reopen on Friday. He further announced that the United States would end its blockade of Iranian ports.
"Ships of the World, start your engines. Let the oil flow!" Trump wrote.
Financial markets reacted quickly to the development. Brent crude futures dropped about 4% in early Monday trading, while US West Texas Intermediate crude declined more than 4.6%.
Iranian Deputy Foreign Minister Kazem Gharibabadi said negotiations on a broader agreement would continue during a 60-day ceasefire period, including discussions on sanctions relief. Sources had previously told Reuters that Iran's nuclear programme would also be addressed during those talks.
The conflict, which began after US and Israeli strikes on Iran on February 28, has left thousands dead, primarily in Iran and Lebanon. During the war, Iran launched attacks on Israel and Gulf countries hosting American military facilities and disrupted shipping through the Strait of Hormuz, while US forces responded by blocking Iranian ports.
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Israel did not immediately comment on the announcement. Israeli officials have previously stated that they were not party to the proposed US-Iran arrangement.
The prolonged conflict has also created political challenges for Trump and Republicans ahead of November's midterm elections, with voters expressing concern over rising fuel costs. At the same time, some members of Trump's own party have pushed for the complete dismantling of Iran's nuclear capabilities.
Lebanon tensions shadow breakthrough
The breakthrough came despite fresh tensions triggered by an Israeli strike in Lebanon on Sunday, an action that drew criticism from both Tehran and Trump.
Iranian negotiator Mohammad Baqer Qalibaf said Israel's attack on Beirut's southern suburbs — which Israel said targeted Hezbollah fighters backed by Iran — demonstrated that Washington lacked "the will and ability to fulfill your commitments" in a post on X.
Iran's foreign ministry blamed the United States for the strike. Tehran warned of a "strong response", while Iran's top joint military command declared that its "finger (is) on the trigger" and ready to strike at the "enemy's heart".
Earlier on Sunday, Trump criticised the Israeli operation, writing: "This morning's attack on Beirut should not have happened, particularly on a special day when we are so close to a Peace Deal with Iran."
Israeli Prime Minister Benjamin Netanyahu has reportedly clashed with Trump over US demands that Israel scale back military operations in Lebanon to facilitate a diplomatic agreement with Iran.
Israel has maintained that it must preserve operational freedom in Lebanon, while Tehran has insisted that a comprehensive ceasefire there is a central condition of any settlement.
According to Israel's N12 television network, citing a senior official, Trump briefed Netanyahu on progress in the negotiations during a phone call on Sunday.
Nuclear curbs and sanctions relief
Before the agreement was publicly announced, a senior Iranian official told Reuters that the draft framework included the release of $25 billion in frozen Iranian assets by the United States.
In return, Iran would commit to refraining from producing or obtaining nuclear weapons. The official added that Tehran had agreed to preserve the current status of its nuclear programme — including halting uranium enrichment expansion and refraining from enlarging nuclear facilities — until a final accord is reached.
A US official, speaking before the announcement, said the eventual agreement would result in the dismantling of Iran's nuclear programme and the removal and destruction of its stockpile of highly enriched uranium.
However, a senior Iranian official said the draft arrangement would permit Iran, which denies seeking nuclear weapons, to dilute enriched uranium within the country rather than transfer it abroad.
A source familiar with the negotiations told Reuters that Qatari mediators travelled to Tehran on Sunday as efforts intensified to secure the final agreement.
The proposed framework has also sparked resistance among hardline factions inside Iran. Residents and local media reported that pro-government rallies held across the country on Saturday night saw vocal opposition to the deal.
One resident in the northeastern city of Mashhad told Reuters that demonstrators chanted: "Death to the compromiser," an apparent reference to Iranian Foreign Minister Abbas Araqchi.
(With inputs from Reuters)
