Trump Cancels Strikes on Iran, Claims 'Great Settlement' Reached as Tehran Cites Unfinished Deal

In a sudden diplomatic pivot that halted a major military escalation, President Donald Trump announced on Thursday evening that the United States and Iran have reached a "great settlement" to end their three-month war. Claiming that a preliminary agreement had been approved by the highest levels of Iranian leadership, Trump abruptly canceled a wave of scheduled missile strikes and bombings against Tehran. The proposed deal, described as a highly detailed Memorandum of Understanding, aims to implement a ceasefire, lift the U.S. naval blockade, and reopen the Strait of Hormuz to global shipping.[1][3]

The announcement marked a dramatic reversal from the White House's posture just hours earlier. On Thursday morning, Trump had publicly threatened to hit Iran "very hard" and warned that U.S. forces would seize Kharg Island—Iran's primary oil export terminal—in the "not too distant future." The president had suggested the U.S. could assume total control of Iranian oil and gas markets, though he later acknowledged to Fox News that he was unsure if the American public had the "stomach" for such a prolonged occupation.[3][5]

If finalized, the settlement would mark the most significant diplomatic breakthrough since the conflict erupted in late February 2026. According to the White House, the framework includes a 60-day ceasefire extension to facilitate formal nuclear negotiations. Trump asserted that the agreement guarantees Iran will never obtain a nuclear weapon, though he conceded to reporters that the current nuclear provisions are "a little conceptual." He noted that Iran's enriched material remains inaccessible because it was "buried under a mountain" following U.S. bunker-buster strikes earlier in the campaign.[1][4]

Despite the optimism in Washington, officials in Tehran quickly cautioned that the war is not yet over. Iranian Foreign Ministry spokesperson Esmaeil Baghaei confirmed that while large portions of the draft text have been finalized, the Islamic Republic has not formally approved the agreement. Baghaei accused U.S. negotiators of repeatedly shifting their positions and attempting to impose "illegitimate" new demands at the eleventh hour. He emphasized that any final decision remains under review by Iran's supreme decision-making bodies.[2][6]

The diplomatic friction centers on Iran's core demands, which include the complete lifting of international sanctions and the release of billions of dollars in frozen assets. Iranian state media has warned that Tehran will not compromise on its "red lines" simply to secure a pause in American airstrikes. A European diplomat briefed on the negotiations noted that while the broad strokes of the deal were agreed upon weeks ago, there remains a "50 percent chance" that the fragile framework could collapse before a formal signing.[2][6]

The breakthrough follows a perilous 48-hour window in which the conflict threatened to spiral into a broader regional conflagration. On Wednesday night, U.S. Central Command launched a barrage of Tomahawk missiles and fighter jet attacks against Iranian military surveillance and air defense sites. In response, Iran fired waves of drones and ballistic missiles at bases hosting U.S. forces in Kuwait, Bahrain, and Jordan. The exchange effectively shattered a fragile two-month truce and prompted frantic intervention from international mediators.[3][7]

Behind the scenes, diplomats from Qatar and Pakistan worked aggressively to salvage the negotiations even as bombs fell. Pakistani officials confirmed they remained engaged in shuttle diplomacy to broker a negotiated settlement, while Qatar condemned the regional strikes and urged an immediate return to the drafting table. Their efforts culminated in the draft text that Trump ultimately touted in the Oval Office, which he claimed had been reviewed by regional stakeholders including Saudi Arabia, the UAE, and Egypt.[7][8]

The human and economic toll of the three-month war has been severe. Thousands of casualties have been reported across the region, and commercial shipping has been paralyzed by the crossfire. Just a day prior to the settlement announcement, a U.S. military strike on a tanker in the Gulf of Oman resulted in the deaths of three Indian seafarers, prompting formal protests from New Delhi and underscoring the escalating danger to international maritime crews caught in the blockade zone.[8]

The prospect of seizing Kharg Island had deeply alarmed energy analysts and military strategists alike. The island handles the overwhelming majority of Iran's crude oil shipments; capturing and holding it would have required a massive amphibious assault and a long-term deployment of U.S. ground troops. Furthermore, analysts warned that such a move would almost certainly trigger Iranian retaliation against the oil infrastructure of neighboring Gulf states, potentially crippling global energy supplies.[3][7]

Global financial markets reacted instantly to the de-escalation. The S&P 500 jumped 1.3 percent on Thursday afternoon, while the Dow Jones Industrial Average and Nasdaq composite posted similar gains. Simultaneously, global oil futures dropped between 3 and 4 percent as the immediate threat to the Strait of Hormuz—a maritime chokepoint through which a fifth of the world's oil flows—began to recede. Trump explicitly pointed to the market rally as proof that investors "like the deal."[4][5]

The sudden announcement appeared to catch some key U.S. allies off guard. Israeli Prime Minister Benjamin Netanyahu was reportedly not given advance notice of the canceled strikes or the finalized Memorandum of Understanding. However, following a phone call with Trump, Netanyahu's office released a statement expressing appreciation for the U.S. commitment that any final treaty would require the dismantling of Iran's enrichment infrastructure and limitations on its ballistic missile production.[4]

Looking ahead, the White House expects the Memorandum of Understanding to be formally signed in Europe as early as this weekend. While President Trump indicated he would not attend the ceremony in person, he announced that Vice President JD Vance, alongside top peace envoys Jared Kushner and Steve Witkoff, would travel to represent the United States. The immediate next step will be the formal lifting of the U.S. naval blockade, which the administration has promised will occur the moment the ink dries.[3][4]

For now, the Middle East remains in a tense holding pattern. U.S. forces in the Persian Gulf remain on high alert, and the naval blockade continues to restrict maritime traffic. Whether the "great settlement" translates into a durable peace treaty depends entirely on the closed-door deliberations currently underway in Tehran, where Iranian leadership must weigh the promise of economic relief against the stringent nuclear concessions demanded by Washington.[1][2]