A landmark preliminary peace agreement between the United States and Iran that halted a months-long devastating conflict across the Middle East hit an immediate snag this week, after Washington confirmed that high-level final talks scheduled in Switzerland have been postponed due to unresolvable logistical challenges. The delay came just one day after the leaders of both nations signed the Islamabad Memorandum of Understanding (MoU), a 14-point framework that pauses hostilities and lays the groundwork for a permanent end to the war that broke out in late February 2026.
US Vice President JD Vance, who was set to lead the American negotiating delegation to Switzerland, will not travel as planned, the White House announced late Thursday, noting that logistics for the summit had proven far from “simple or predictable” amid the complex, fast-moving diplomatic process.
The preliminary deal, signed separately by US President Donald Trump and Iranian President Masoud Pezeshkian on Wednesday, marks the official end to open military conflict that has upended regional stability, crippled energy markets, and caused widespread humanitarian damage across the Middle East. The framework establishes a path to restore open commercial shipping through the Strait of Hormuz, the critical Persian Gulf chokepoint that handles roughly 20% of global oil supplies, which had been effectively blocked by Iran since the outbreak of hostilities. That blockade triggered a sharp surge in global crude prices in the months following the war’s start.
Within hours of the MoU’s signing, the first wave of commercial shipping resumed: three Saudi-flagged supertankers completed transits through the strait by Thursday morning. Under the terms of the memorandum, Iran will guarantee toll-free safe passage for all commercial vessels through the waterway for the 60-day negotiating window, but the long-term status of shipping fees remains a major unresolved point of disagreement. Trump told The New York Times over the weekend that the final agreement would lock in a permanent toll-free arrangement, but Iranian officials announced Thursday that they plan to introduce transit fees for long-term operations. The MoU itself offers only vague guidance, requiring Iran to negotiate future regulatory frameworks with Oman and other Gulf littoral states in line with international law and the sovereign rights of coastal nations.
The deal also outlines a series of economic concessions to Iran, whose economy has been crippled by decades of US sanctions compounded by a US naval blockade on exports imposed after the war began. Per the MoU’s terms, the US began dismantling its naval blockade on Friday morning, with full withdrawal of blockading forces scheduled for 30 days after the preliminary deal was signed. The framework also commits the US to lift all existing sanctions on Iran — including multilateral UN and IAEA sanctions, as well as Washington’s unilateral primary and secondary sanctions — as part of a final agreement, and to unlock billions of dollars in Iranian assets frozen by the US, some dating back to the 1979 Islamic Revolution.
One of the most contentious sticking points surrounding economic relief is the proposed $300 billion reconstruction and development fund for Iran outlined in the MoU. Initial statements from Vice President Vance suggested the US would lead the funding effort, but senior administration officials have since walked that pledge back. Vance clarified Monday that the US would instead invite third countries to contribute to the fund, and Trump doubled down on that position Tuesday, telling reporters the US would not invest “ten cents” in Iranian reconstruction.
On the regional security front, the MoU requires an immediate and permanent end to all military operations across all fronts, including Lebanon, where Israel has expanded its invasion of southern Lebanon to disarm the Iran-aligned Hezbollah movement since March. The agreement commits both the US and Iran to upholding Lebanon’s territorial integrity and sovereignty, but it makes no mention of Israel, which currently occupies roughly one-fifth of southern Lebanon and has continued airstrikes that have killed more than 3,000 people since March, even after the MoU was signed. A senior US official confirmed Friday that Israel and Hezbollah had agreed to a new ceasefire, but top Israeli officials have repeatedly rejected the US-Iran deal, saying it does not bind their government and that they will not withdraw from occupied Lebanese territory until Hezbollah is fully disarmed. Far-right Israeli National Security Minister Itamar Ben-Gvir said Monday that the agreement does not meet Israel’s security requirements, and Defense Minister Israel Katz confirmed this week that Israeli forces would remain indefinitely in self-declared “security zones” across Lebanon, Syria, and Gaza. Trump publicly criticized Israel’s conduct in Lebanon during a G7 summit Tuesday, marking a clear rift with Israeli Prime Minister Benjamin Netanyahu, saying that Israel had fought in Lebanon for “too long” and that unnecessary civilian casualties from widespread bombing were unacceptable.
The most consequential unresolved security issues, including the status of Iran’s nuclear program and its ballistic missile arsenal, have been deliberately deferred to the 60-day negotiating period outlined in the MoU, with the window extendable by mutual consent of both parties. The US has long alleged that Iran’s enriched uranium stockpile is evidence of a covert nuclear weapons program, a claim Iran has consistently denied — a denial explicitly reaffirmed in the preliminary agreement. Currently, Iran holds uranium enriched to roughly 70%, a level far higher than the 5% needed for civilian energy production, but still below the 90% enrichment required for nuclear weapons. The MoU only requires that the two sides negotiate a mutually acceptable framework for managing the stockpile as part of a final deal. US officials have proposed exporting the stockpile to a third country, a step Iranian Supreme Leader Mojtaba Khamenei has reportedly already ruled out.
Notably, the MoU makes no mention of limiting Iran’s ballistic missile program — a core stated war objective for the US when hostilities began. At the war’s start, Trump justified US intervention by warning that Iran’s arsenal of more than 3,000 ballistic missiles, the largest in the Middle East, could soon reach the US mainland. But this week, Trump shifted his stance, telling reporters that if other regional powers possess ballistic missiles, it is unfair to deny Iran the same capability, adding that “missiles are not the problem” in terms of global catastrophic risk.
The agreement also formally abandons the long-rumored US and Israeli goal of regime change in Tehran. The MoU explicitly requires both nations to respect each other’s sovereignty and refrain from interference in internal affairs. At the G7 summit this week, Trump claimed he “never cared about regime change” in Iran, praising the current Iranian leadership, which took power after a US-Israeli airstrike killed longtime Supreme Leader Ali Khamenei in February. “I think they’re very smart, I think they’re far less radicalised; I think they’re good,” Trump said, adding “Frankly, I think that’s regime change.” The statement marked a sharp reversal from Trump’s address on the first day of the war, when he called on the Iranian people to overthrow the clerical government and declared “the hour of your freedom is at hand.”
All remaining outstanding issues will be negotiated over the next 60 days, and any final peace agreement will be codified in a binding United Nations Security Council resolution, per the MoU’s terms.