US and Iran Sign Preliminary Deal to End 109-Day War: What the MoU Actually Says

The 109-day war between the United States and Iran has reached a sudden and tentative halt, bringing a moment of cautious relief to a highly volatile region. On Sunday, a preliminary Memorandum of Understanding (MoU) was digitally signed by US President Donald Trump, Vice President JD Vance, and Iranian Parliament Speaker Mohammad Bagher Ghalibaf. The agreement marks the first concrete step toward ending a devastating conflict that has paralyzed global shipping and threatened to engulf the broader Middle East. While the digital signatures have officially paused the fighting, officials acknowledge that the diplomatic heavy lifting is only just beginning.[2][4]

Speaking from the G7 summit in Évian-les-Bains, France, President Trump declared the peace deal "all signed," projecting absolute confidence that the immediate military crisis had been successfully resolved. The preliminary framework sets the stage for a formal, highly anticipated in-person signing ceremony scheduled for Friday in Geneva, Switzerland. High-ranking American and Iranian officials, including Vice President Vance, are expected to attend the summit, marking a historic diplomatic convergence after months of intense military confrontation and bitter rhetoric. Western leaders at the G7 are now scrambling to understand the exact parameters of the agreement and ensure it does not immediately unravel.[1][5]

The most immediate and globally consequential provision of the MoU is the reopening of the Strait of Hormuz. The narrow waterway, which facilitates the transit of roughly one-fifth of the world's daily oil consumption, had been effectively closed by a combination of Iranian threats and a US naval blockade. The agreement mandates that the strait be completely open and toll-free by Friday, a logistical pivot that promises to restore normalcy to international maritime trade.[1]

Financial markets reacted instantly and aggressively to the news of the unblocked strait. Global oil prices plummeted to a three-month low on Monday morning, erasing the massive risk premiums that had been priced into energy markets since the war began in late February. Simultaneously, global equity markets surged as investors breathed a collective sigh of relief over the averted threat of a prolonged global energy shock. The immediate economic dividend provides the Trump administration with a powerful domestic talking point as it attempts to sell the complex diplomatic framework to a skeptical public.[1]

Despite the market exuberance, the actual text of the MoU is remarkably brief. Vice President Vance described the document as a "very general" framework spanning roughly a page and a half. Rather than a comprehensive peace treaty, the MoU serves as a diplomatic placeholder. It establishes a 60-day ceasefire window during which American and Iranian delegations must conduct complex technical negotiations to hammer out the final, binding details.[1][5]

The central pillar of these upcoming technical talks will be the permanent status of Iran's nuclear program. According to the Trump administration, the preliminary agreement includes an explicit commitment from Tehran to never acquire or develop a nuclear weapon. To enforce this, the MoU guarantees that international nuclear inspectors will be allowed to return to Iranian facilities, restoring a level of oversight that had vanished during the conflict.[1][3]

In exchange for verifiable nuclear compliance and a broad commitment to regional stability, the framework outlines significant economic incentives for Tehran. The absolute centerpiece of this economic relief is a proposed $300 billion reconstruction fund designed to rebuild Iran's war-battered infrastructure and stabilize its collapsing domestic economy. This staggering financial figure has immediately become the most heavily scrutinized element of the preliminary deal, drawing intense fire from hawkish lawmakers who fear it amounts to an unconditional bailout for a hostile regime.[3]

Anticipating fierce domestic backlash, the US administration has been quick to clarify the underlying mechanics of the massive reconstruction fund. Vice President Vance emphasized repeatedly that American taxpayers will not be footing the bill for Iran's recovery. Instead, the $300 billion is expected to be financed by neighboring Gulf states and private multinational companies eager to invest in a newly opened, post-war Iranian market. This public-private financing structure is intended to shield the White House from accusations of funding a former adversary.[3][5]

Furthermore, the administration insists that the disbursement of these funds—along with any unfreezing of currently sanctioned Iranian assets—will be strictly conditional. "Iran doesn't get a dime of money unless they perform their obligations," Vance stated in a televised interview on Monday. The White House maintains that economic relief will be doled out incrementally, tied directly to verifiable performance metrics regarding nuclear containment and the complete cessation of regional hostilities. Any breach of the agreement, officials warn, would result in the immediate snapback of crippling sanctions.[1][3]

While Washington and Tehran celebrate the diplomatic breakthrough, the sudden agreement has exposed deep and immediate rifts with key US allies, most notably Israel. The US-Iran war was deeply intertwined with ongoing Israeli military operations against Hezbollah in Lebanon, and Israeli leadership views the sudden bilateral ceasefire with profound skepticism. For Jerusalem, a deal that pauses the broader conflict without dismantling Iran's proxy network is seen as a strategic misstep that leaves Israel vulnerable on its northern border.[3][4]

Israeli Prime Minister Benjamin Netanyahu and Defense Minister Israel Katz have publicly criticized the framework, arguing that it fails to adequately contain Iranian-funded proxy forces operating across the Middle East. Katz issued a defiant public statement clarifying that the Israel Defense Forces (IDF) will absolutely not withdraw from southern Lebanon, regardless of the ceasefire terms agreed upon by the United States and Iran. This hardline stance guarantees that localized combat operations will continue despite the broader geopolitical pause.[3][4]

The US administration has openly acknowledged this diplomatic friction, confirming to reporters that the MoU is not explicitly conditioned on an IDF withdrawal from Lebanon. This deliberate carve-out leaves a significant theater of the broader regional conflict entirely unresolved. It raises urgent questions about exactly how long a US-Iran ceasefire can hold if Israeli and Iranian-backed forces continue to clash violently just across the border, potentially dragging Washington back into the fray.[4]

Domestically, the White House faces mounting pressure from its own political party. Senate Republicans, returning to Washington on Monday, demanded thorough intelligence briefings on the deal's hidden specifics. Senate Majority Leader John Thune noted that lawmakers remain entirely in the dark about the exact conditions attached to the financial incentives and the enforcement mechanisms for the nuclear pledges. Thune warned that congressional approval is far from guaranteed until the administration provides total transparency regarding the 60-day negotiation roadmap.[1]

Meanwhile, Iranian officials are projecting absolute confidence and moving aggressively forward with the diplomatic timeline. Foreign Minister Abbas Araghchi announced in a televised briefing to foreign diplomats that technical talks regarding the final nuclear agreement will likely commence on Friday, coinciding perfectly with the Geneva signing ceremony. Tehran appears eager to capitalize on the momentum, hoping to translate the preliminary ceasefire into permanent, irreversible sanctions relief before political opposition in Washington or Jerusalem can derail the process.

For now, the world's attention remains squarely fixated on the waters of the Strait of Hormuz. President Trump has promised that the vital waterway will be fully operational and toll-free by the end of the week. This logistical milestone will serve as the first major real-world test of the MoU, determining whether a 1.5-page document can truly end a devastating 109-day war, or if it merely delays the next inevitable escalation in a deeply fractured region.[5]