Iran Tensions Ease as US and Tehran Prepare to Sign Ceasefire Agreement in Geneva

As Iran tensions ease following months of conflict, the United States and Iran are set to sign a preliminary agreement on Friday in Geneva to implement a ceasefire, reopen the Strait of Hormuz, and begin negotiations on Iran's nuclear program, sanctions relief, and other unresolved issues. The agreement will be formally signed on Friday in Geneva, with the full text to be released then; it includes a ceasefire that holds while negotiators address the future of Iran's nuclear program within up to 60 days. [1] Both sides have agreed to immediately reopen the Strait of Hormuz, though differences remain on issues such as a potential Iranian service fee for ships, naval mine clearance that could take up to 50 days, and confirmation of resumed traffic. [1]

Agreement Signing and Ceasefire Framework

The agreement that will be signed on Friday in Geneva provides that negotiators from both sides will work toward a consensus on the future of Iran's nuclear program within a period of up to 60 days. [1] This ceasefire framework is intended to last while the parties discuss the central open issue of the Iranian nuclear program. [1] The preliminary understanding reached by the United States and Iran aims at ending months of conflict, reopening the Strait of Hormuz, and creating a framework for further talks on Iran's nuclear program and sanctions relief. [2] Officials from both sides have indicated that future negotiations will focus on long-term security arrangements and mechanisms for verifying compliance. [2] The full text of the document will be known on Friday when the signing ceremony takes place in Geneva, Switzerland. [1]

Unresolved Issues on Iran's Nuclear Program

This remains the key point of the talks that is still open. [1] The government of Trump wants Iran to end its nuclear program completely, which Washington says serves to create nuclear weapons and was the main argument for the attack on Iran on 28 February that began the war. [1] Trump stated that his negotiating team demanded that an independent team enter Iran, excavate all nuclear material, and send the already enriched uranium out of Iranian territory, possibly to Russia, which has offered to receive the material. [1] Tehran, however, denies this and states that the program is used exclusively for civilian purposes. [1] The topic is thorny, and Washington and Tehran remain far from a consensus. [1] The proposal comes after the United States and Iran reached a preliminary understanding aimed at ending months of conflict and launching further negotiations on Iran's nuclear program. [2]

Strait of Hormuz Reopening Challenges

Both Washington and Tehran stated that the Strait of Hormuz, which became the great point of tension in the war, will be reopened immediately. [1] Donald Trump affirmed that he had already ordered the lifting of the naval blockade that U.S. Navy ships were maintaining at the entrance to the strait, preventing the passage of ships that trade with Iranian ports in the region. [1] On Monday, Trump said that ship traffic in the channel had already begun to move after the announcement, but Iran, which in practice controls the movement of ships in Hormuz, has not confirmed this. [1] The Ministry of Defense of Iran also announced that it will begin charging a service fee to ships that cross the strait, although Donald Trump stated that the agreement prohibits the establishment of a toll on local vessel traffic. [1] A complete sweep to deactivate all explosives could take up to 50 days, and before that, navigation in the strait would still be unfeasible due to requirements from insurers and maritime cargo operators. [1] The reopening of the Strait of Hormuz remains a central element of the diplomatic process. [2]

Sanctions Relief and Proposed Reconstruction Fund

Among the demands published by Iran for the end of the conflict is the suspension of sanctions on the sale of oil, petrochemical products, and derivatives, as well as full access by Iran to its financial resources that are frozen. [1] The United States agreed to relax and ease economic sanctions, but in a gradual manner and conditioned on compliance with the agreement. [1] The objective of Tehran is to reestablish oil exports to recover its economy, which was severely affected by more than three months of conflict. [1] Iran also wants the United States and allies to present a reconstruction plan for the country worth at least $300 billion as compensation for the damage caused by the war. [1] The administration of U.S. President Donald Trump is prepared to support the creation of a proposed $300 billion private investment fund for Iran as part of broader efforts to secure a lasting agreement with Tehran. [2] The fund would be financed entirely by international private companies and would become accessible only if Iran complies with a comprehensive agreement covering an end to hostilities, continued nuclear negotiations, and implementation of key commitments. [2] Under the reported plan, Iran would gain access to investment funds only after fully implementing agreed measures, including maintaining the ceasefire, supporting the reopening of the Strait of Hormuz, and making tangible progress in nuclear negotiations. [2] U.S. officials have said any sanctions relief would be phased and linked to Iran's adherence to the agreement. [2]

Disagreements Over Lebanon and Israeli Position

This is one of the points where there is less consensus, at least between Israel and the other parties. [1] The official announcement of the agreement made by the prime minister of Pakistan, Shehbaz Sharif, highlighted that the permanent end of military operations includes the front in Lebanon. [1] The end of Israeli attacks on Lebanese territory is even a direct demand from Tehran to sign the agreement, because Iran is an ally and finances Hezbollah, the target of Israeli attacks in Lebanon. [1] On Monday, Benjamin Netanyahu said that his troops will remain in the security zones, spaces occupied by Israel inside Lebanese territory, until it is necessary. [1] A proposed agreement between the United States and Iran has exposed growing differences between President Donald Trump and Israeli Prime Minister Benjamin Netanyahu, raising concerns within Israel's political and security establishment about the future direction of U.S. policy toward Tehran. [4] Netanyahu is seeking urgent consultations with Trump following the agreement, amid concerns that the deal could ease pressure on Tehran without fully addressing Israel's security demands, particularly regarding Iran's nuclear activities and regional influence. [4] Israeli leaders have reacted cautiously to the agreement. [4]

International Reactions and Economic Implications

Europe celebrates the agreement between the United States and Iran but issues an alert on nuclear weapons. [1] South Korea's President Lee Jae Myung welcomed the prospective peace deal between the United States and Iran, calling it an important step forward that the international community has been expecting for a long time. [3] Lee expressed appreciation for Trump's leadership and the diplomatic efforts of the concerned parties for reaching the conclusion of the negotiations. [3] He also expressed anticipation for eased inflationary pressure on South Korea's energy import-dependent economy, as well as the free passage of South Korean vessels in the Strait of Hormuz following the end of the war. [3] The strategic waterway carries a significant share of global oil exports, and its restoration has been welcomed by energy markets and governments concerned about global supply disruptions and rising shipping costs. [2] The waterway carries roughly one-fifth of global oil shipments, and its reopening is viewed by Washington and international markets as a key step toward reducing energy risks and restoring stability to global trade following months of regional tensions. [4]

What to watch next: Future negotiations will focus on long-term security arrangements and mechanisms for verifying compliance, with access to the proposed fund depending on Iran's appropriate behavior in the weeks and months ahead.