US and Iran strike framework deal to end war, promise open Strait of Hormuz and nuclear concessions

Breakthrough after weeks of talks

The United States and Iran reached the framework agreement late on Sunday, mediated by Pakistan. US President Donald Trump, Vice President JD Vance, and Iranian chief negotiator Mohammad Bagher Ghalibaf digitally signed the document, although confirmation from Tehran is still pending. A ceremonial signing is scheduled for Friday in Geneva, where Vance will attend in person.

It's a very general document.

Vance described the memorandum as roughly one and a half pages long, emphasising that many details will be ironed out during a subsequent 60‑day phase of technical negotiations aimed at producing a comprehensive peace treaty.

Strait of Hormuz: open but with fee dispute

Speaking before the G7 summit in Évian‑les‑Bains, France, Trump declared the Strait of Hormuz will be "open and toll‑free." He said ships began transiting on Monday; Iranian media reported three oil tankers and two laden cargo ships passed through the area previously under US naval blockade. However, Iran's foreign ministry immediately contradicted this, stating that fees for maritime services will be charged.

She will be open and toll‑free.

Vance separately told CNBC that the waterway would be reopened "long‑term and toll‑free," while Iran's Esmail Bakaei maintained that service charges apply. Clearing sea mines laid by Iran will be necessary before full reopening, Trump noted.

Nuclear commitments and inspections

Trump announced on Truth Social that "Iran has agreed never to possess nuclear weapons." Vance confirmed that under the deal Iran will readmit International Atomic Energy Agency inspectors and destroy its highly enriched uranium, with the US and IAEA assisting in the destruction. A start date for inspections could be set on Friday.

One of the core points of the agreement is that the IAEA and the USA will support Iran in destroying its highly enriched uranium.

Financial incentives and frozen assets

Iranian media say the deal provides for the release of $24 billion in frozen Iranian assets, and Foreign Ministry spokesperson Bakaei said Washington committed to freeing those funds and covering war damages. Vance, however, insisted in multiple interviews that no US taxpayer money will flow to Iran.

Separately, the Financial Times reported that Washington is dangling a potential $300 billion investment fund if Iran upholds the ceasefire, keeps the Strait open and cooperates on nuclear issues. For Tehran, such an incentive could offer a path out of years of sanctions, high inflation and isolation, providing access to a market of about 90 million people and much‑needed infrastructure modernisation.

Challenges ahead: Lebanon and Israeli stance

A key Iranian demand is an immediate and permanent ceasefire on all fronts, including Lebanon. Nevertheless, Israel continues operations against Hezbollah, and Defence Minister Israel Katz said Israeli forces will remain in parts of the occupied Lebanese territory. The 60‑day negotiation phase must bridge this gap if the framework is to evolve into a lasting peace.

Next steps

The MoU text will likely be published after Friday's ceremony or within days. A 60‑day ceasefire is expected while both sides negotiate a full agreement covering Iran's nuclear programme, sanctions relief and regional security.