US and Iran Edge Toward Temporary Agreement to Halt Conflict
The United States and Iran are reportedly moving closer to a limited, temporary agreement aimed at halting ongoing hostilities, according to multiple sources and officials. This potential framework, which remains in draft form, seeks to cease fighting while leaving several contentious issues unresolved.
Framework for a Temporary Agreement
The emerging plan focuses on a short-term memorandum rather than a comprehensive peace deal, highlighting the significant divisions that persist between the two nations. This suggests that any agreement reached at this stage would be an interim measure rather than a final resolution.
Market reactions have already begun to reflect optimism regarding a potential deal, particularly concerning the reopening of the strategically vital Strait of Hormuz. Asian stock markets have surged to near-record highs, while oil prices have experienced notable declines amid speculation that supply disruptions could ease.
Both Tehran and Washington have tempered their expectations for a sweeping settlement, particularly regarding Iran’s nuclear program. Key issues include the status of Iran’s highly enriched uranium stockpiles and the duration of any nuclear work suspension.
Instead, the focus appears to be on establishing a temporary arrangement that would prevent a return to conflict and stabilize shipping routes through the Strait of Hormuz. A senior Pakistani official involved in mediation efforts indicated that the priority is for both sides to announce a permanent end to hostilities, with other issues to be addressed during subsequent direct talks.
Proposed Stages of the Agreement
The proposed framework is expected to unfold in three distinct stages: formally ending the conflict, addressing the crisis in the Strait of Hormuz, and initiating a 30-day period for negotiations aimed at a broader agreement. Sources familiar with the mediation process have indicated that a one-page memorandum to formally end the conflict is nearing completion, although significant gaps remain between the parties.
US Leadership and Iranian Skepticism
US President Donald Trump has expressed optimism about the potential for a breakthrough since the conflict began on February 28. He stated that both sides are interested in reaching a deal and suggested that it could be resolved quickly. However, the proposal would leave unresolved key US demands, including a suspension of Iran’s nuclear program and the reopening of the Strait of Hormuz.
Iranian officials have expressed skepticism regarding the proposal. A spokesperson from the foreign ministry indicated that Tehran would respond in due course, while lawmaker Ebrahim Rezaei characterized the proposal as more of an American wish-list than a feasible agreement. Additionally, Iran’s parliament speaker, Mohammad Baqer Qalibaf, mocked reports suggesting that negotiations were close, referring to them as US spin following its failure to reopen the Strait of Hormuz.
Market Reactions to Potential Agreement
Reports of a possible agreement have led to a significant decline in global oil prices, with benchmark Brent crude futures dropping approximately 11 percent to around $98 a barrel before rebounding above $100 and stabilizing around $99. Global share prices have also risen, and bond yields have fallen, reflecting optimism about an end to a conflict that has disrupted energy supplies.
Takamasa Ikeda, a senior portfolio manager at GCI Asset Management, noted that while the contents of the US-Iran peace proposals are limited, market expectations are leaning toward the belief that further military action will not occur.
Ongoing Military and Regional Tensions
On Tuesday, Trump paused a naval mission aimed at reopening the blockaded Strait of Hormuz, citing progress in negotiations. Meanwhile, the US military has maintained its blockade on Iranian vessels in the region. US Central Command reported that forces fired upon an unladen Iranian-flagged tanker on Wednesday, disabling it as it attempted to sail toward an Iranian port in violation of the blockade.
Unresolved Key Demands
Even if an agreement is reached, the memorandum would leave several fundamental disputes unresolved. The US negotiations are reportedly being led by Trump’s envoy Steve Witkoff and son-in-law Jared Kushner. Should both sides agree to the preliminary deal, a 30-day timeline for detailed negotiations would commence.
Sources indicate that the memorandum does not address several key US demands previously rejected by Iran, including restrictions on Iran’s missile program and an end to its support for proxy militias in the Middle East. Additionally, the memorandum does not mention Iran’s existing stockpile of over 400 kg of near-weapons-grade uranium, a central concern for Washington.
Source: www.arnnewscentre.ae
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Published on 2026-05-07 06:46:00 • By the Editorial Desk
