US-Iran Islamabad Memorandum Opens 60-Day Window as Ceasefire Extension Takes Effect
Deal Signed in Islamabad After Weeks of Back-Channel Talks
The United States and Iran signed a landmark memorandum of understanding on Wednesday, opening a 60-day window to negotiate a permanent end to the conflict that began when Washington and Tel Aviv launched strikes against Tehran in late February. The agreement, mediated by Pakistan and formally titled the Islamabad Memorandum of Understanding, was electronically signed by President Donald Trump and President Masoud Pezeshkian. It includes an extension of the existing ceasefire, the reopening of the Strait of Hormuz to commercial traffic, and a framework for discussions on Iran’s nuclear programme and the removal of American sanctions.
“This was not easy,” Trump told attendees at the Versailles Palace immediately before signing, pausing with pen in hand. “I can tell you that.”
The deal drew an immediate backlash from some of Trump’s fellow Republicans, who argued it handed Tehran billions of dollars in sanctions relief without achieving binding curbs on its nuclear programme. Within hours of the signing, party leaders in Congress signaled they would move to block any suspension of sanctions under the agreement.
Tehran’s Conditions and Compliance Architecture
Iran’s Supreme Leader, Ayatollah Mojtaba Khamenei, approved the memorandum despite publicly stating he held a “different view” on the terms. In a statement carried by state television, Khamenei said he issued his permission based on commitments made by the Iranian president on behalf of the Supreme National Security Council. Esmaeil Baghaei, the Foreign Ministry spokesperson, told Iranian media that Tehran would monitor American compliance “without any leniency” and would not consider its own obligations fulfilled if Washington failed to meet its commitments.
Baghaei also clarified that Iran’s ballistic missile programme would remain off the negotiating table during the 60-day period, and that Tehran would not ship its stockpile of highly enriched uranium abroad. He said the United States bore responsibility for ensuring Israel respected its cease-fire obligations toward Iran.
“The IAEA welcomes the agreement and is ready to begin technical consultations immediately,” Grossi said in a statement issued after the signing. He added that his team would need “full and timely access” to nuclear sites for the process to remain on track.
Regional Friction and the Lebanon Question
Even as diplomats in Islamabad and Geneva worked to solidify the agreement, Israeli air strikes continued against targets in Lebanon, raising questions about whether the wider regional conflict would ease alongside the American-Iranian understanding. Israeli Prime Minister Benjamin Netanyahu issued a statement underscoring Israel’s commitment to its security interests and the preservation of its relationship with Washington, which he said had stood “shoulder to shoulder” with Israel during the fighting.
The Strait of Hormuz, through which roughly a fifth of the world’s oil and liquefied natural gas normally passes, had seen maritime traffic fall to a fraction of pre-war levels since late February. Industry executives had warned the Trump administration that the disruption was draining global energy inventories and risked a sharp surge in prices. Under the new memorandum, Iran and Oman agreed to jointly manage the waterway and charge fees for navigational services.
What Comes Next as the 60-Day Clock Starts
The agreement now moves to a negotiating phase that diplomats describe as the most complex element of the process. American officials have said they expect a full ceasefire on all fronts, including Lebanon and Hezbollah, before the 60-day period concludes. Iranian officials have rejected linking their obligations to events in Lebanon, calling that a separate matter.
Congressional Republicans are preparing legislation that would mandate automatic reimposition of all sanctions if Iran fails to meet its commitments within the specified timeframe. The White House has threatened to veto any such measure, setting the stage for a direct confrontation with lawmakers that could define the second half of the year.
Global energy markets are watching closely. Oil industry analysts say the Hormuz reopening removes a significant risk premium, but that any breakdown in talks would likely send prices sharply higher within days. The next diplomatic milestone is a meeting between American and Iranian negotiating teams scheduled for Geneva next week.
Energy markets reacted with cautious optimism following the announcement. Brent crude fell more than two percent in early Thursday trading as investors priced in the prospect of normal commercial flow through the Strait of Hormuz for the first time since late February. Ship-tracking data showed a small number of vessels already moving through the waterway Thursday afternoon, though maritime sources said a full return to normal traffic patterns would take weeks as insurance and scheduling logistics normalise. Qatar, which exports its liquefied natural gas almost entirely through the strait, said it was in contact with buyers about accelerating shipments. Iran and Oman are expected to finalise their joint management arrangement within the next 30 days, with fees from vessels contributing to the operational costs of the corridor.