US and Iran Reach Deal to End War and Reopen Strait of Hormuz as Israel Vows to Maintain Buffer Zones

The United States and Iran have reached a landmark memorandum of understanding to end a three-and-a-half-month war, signaling the reopening of the Strait of Hormuz and a halt to direct military confrontation. The agreement was signed "digitally" over the weekend by US President Donald Trump, Vice President JD Vance, and Iranian Parliament Speaker Mohammad Bagher Ghalibaf, ahead of a formal ceremony scheduled for Friday in Geneva.[1][4]

The breakthrough, mediated heavily by Pakistani Prime Minister Shehbaz Sharif, aims to dismantle the dual blockades that have choked global trade since late February. Under the terms of the deal, the US will lift its naval blockade on Iranian ports, while Tehran will reopen the Strait of Hormuz to commercial shipping without charging maritime tolls. "Ships of the World, start your engines. Let the oil flow!" Trump announced on social media, declaring the vital waterway would be completely open by the end of the week.[5][7]

The economic reaction was immediate and dramatic. Global stock markets surged, with the tech-heavy Nasdaq jumping 3.1% and the S&P 500 rising 1.7%, as traders bet on an end to the energy chaos that has gripped the global economy. Asian markets, which rely heavily on the petroleum and liquefied natural gas transiting the strait, breathed a collective sigh of relief after months of plummeting currencies and supply chain bottlenecks.[3][6]

However, energy analysts caution that consumers will not see instant relief at the pump. While crude prices plunged on the news, experts warn that it will take weeks or even months for fuel prices to fully normalize. Hundreds of tankers trapped in the Persian Gulf must safely navigate the waterway, and Gulf oil producers require time to ramp up production and resolve logistical backlogs created by the prolonged closure.[3][6]

Domestically, the Trump administration is framing the agreement as a decisive victory that neutralizes Iran's nuclear ambitions without enriching its government. Vice President JD Vance emphasized that the deal includes a "real inspections regime" and assured the public that no American taxpayer money would be directed to Tehran. Reports indicate the agreement may unfreeze roughly $24 billion in Iranian assets and suspend certain sanctions on oil sales, initiating a 60-day negotiating period to finalize details regarding Iran's nuclear program.[1][7]

While the US-Iran pact includes provisions for a comprehensive ceasefire across all fronts, including Lebanon, America's closest Middle Eastern ally has starkly distanced itself from the diplomatic track. In his first public address following the announcement, Israeli Prime Minister Benjamin Netanyahu declared that Israeli forces will not withdraw from the territories they currently occupy.[2][7]

"We established deep security zones around the state of Israel. We did this in Gaza, in Lebanon, and in Syria," Netanyahu stated, insisting that troops would remain in these buffer zones "for as long as necessary to protect our country." Israeli Defense Minister Israel Katz echoed this hardline stance, confirming that the military would maintain its positions indefinitely to defend against what he termed "jihadist elements."[2][8]

The divergence highlights a significant rift between Washington's push for regional de-escalation and Jerusalem's security imperatives. Hardline members of Netanyahu's ruling coalition, including National Security Minister Itamar Ben-Gvir, have explicitly rejected the US-brokered memorandum, arguing that Trump's agreement does not bind Israel and demanding the complete dismantling of Hezbollah before any withdrawal.[2][4]

The coming days will test the durability of the fragile truce. As international maritime task forces prepare to clear mines and escort commercial vessels through the Strait of Hormuz, diplomats face the daunting task of enforcing a ceasefire in a region where Israel and Iranian proxy forces remain locked in active, close-quarters combat.[4][5]