Senior U.S. and Iranian signals on Friday suggested an initial agreement to halt their conflict was within reach, even as new military incidents flared near the Strait of Hormuz. A senior U.S. administration official, speaking on condition of anonymity, said both parties had agreed on a text and that Washington expected to sign an initial deal in the coming days.
On state television, Iranian Foreign Minister Abbas Araqchi said the tentative agreement proved Iran had emerged stronger from the fighting, adding: "Iran is the winner of the war with the U.S." Araqchi cautioned that changes to the deal were still possible.
Hours after those remarks, U.S. forces intercepted and shot down multiple Iranian one-way attack drones that were heading toward the Strait of Hormuz, a source familiar with the matter told Reuters. The source, who spoke on condition of anonymity, said the drones posed a risk to commercial traffic transiting the waterway.
Iranian news agencies reported explosions along the strait in Iran's Sirik port and on Qeshm island. Residents and local officials attributed the detonations to shots fired by Iranian forces, intended to warn vessels attempting to cross the waterway without permission from the Islamic Revolutionary Guard Corps' navy.
Key elements of the proposed memorandum of understanding
Sources on all sides of the negotiations described a draft memorandum that would reopen the Strait of Hormuz and lift the U.S. naval blockade on Iranian ports. The arrangement envisions that detailed negotiations over Iran's nuclear program - cited by U.S. President Donald Trump as the primary reason for initiating the war - would take place following the opening of the strait.
The U.S. official told reporters the deal satisfied Trump's core objectives and placed follow-on negotiations "in a very, very good place." Accounts of the draft proposal provided by Western, Pakistani and Iranian sources indicated terms that could be seen as broadly favorable to Tehran, prompting public criticism from Trump, who dismissed some reports as inaccurate.
While there were reportedly minor differences among accounts of the draft text, the proposals generally appeared to grant Iran many of the concessions it has sought, with the principal U.S. gain appearing to be the reopening of the strait - closed by Iran after U.S. and Israeli strikes in February.
Araqchi said Iran, together with Oman, would retain control over traffic through the strait. He noted the strait's strategic importance by referencing that, prior to the war, it handled one-fifth of the world's oil and gas supply. On state television he said: "Our sword will always hang over the Strait of Hormuz."
A Western source suggested the deal could be signed as soon as Sunday by U.S. Vice President JD Vance and Iran's parliament speaker Mohammad Baqer Qalibaf, with Geneva seen as the likeliest venue. Araqchi said the agreement would be signed remotely before a public announcement. The U.S. administration official added that Europe had been discussed as a signing venue but said no decision had been finalized.
What draft terms reportedly include
According to multiple sources describing draft terms, the United States would begin releasing billions of dollars in frozen Iranian assets and would waive sanctions on Iranian oil exports in exchange for Iran reopening the Strait of Hormuz.
Iran's nuclear program, the draft indicates, would be tackled during a 60-day period of talks. The U.S. official stated that the agreement would ultimately lead to the dismantling of Iran's nuclear program, including the destruction and removal of its stockpile of highly enriched uranium, and that a long-term inspection regime would be put in place to verify compliance.
Those accounts contrasted with comments Araqchi made on state television. He said Iran had not accepted the dismantling of its nuclear program and that Tehran's preferred solution for its stockpile of highly enriched uranium was down-blending the material into a diluted form: "For Tehran, the only preferred solution for its highly enriched uranium stockpile is down-blending the material," he said.
Sources also described discussions about potential war reparations for Tehran and the possibility of dropping longstanding U.S. demands for limits on Iran's missile program. The U.S. official disputed that depiction, emphasizing the performance-based nature of the arrangement: "None of their money released until they perform. Strait of Hormuz will be open. No Iran funding of terrorist groups," the official said. "This is what they have agreed to. This is a performance-based deal."
Israel not party to the memorandum
Israel, which joined the United States in initiating the war, has not been included in negotiations over the memorandum. Prime Minister Benjamin Netanyahu said his country would not be a party to the agreement. In recent weeks Netanyahu and Trump reportedly clashed over U.S. demands that Israel curb military activity in Lebanon to facilitate a U.S.-Iran arrangement.
Araqchi asserted the deal would end the war in Lebanon, a claim that implies an Israeli withdrawal from areas it occupies. Israel's defense minister, however, said it would not withdraw, and a senior Israeli official said Israel expects to retain freedom to act against threats in areas under its control.
Market reaction and political implications
Reports of progress toward a deal came after a week of sharp escalation in Gulf hostilities, which included exchanges of fire between Israel and Iran, U.S. strikes on Iranian targets and retaliatory actions against U.S. bases. Global stock markets rose and oil prices fell on the news; Brent crude fell more than 3% at one point, reaching its lowest level in nearly two months.
The conflict has become a political burden for the White House amid rising fuel prices and slipping approval ratings for President Trump. Some Republicans worry the war's unpopularity could jeopardize control of Congress in the November midterm elections. At the same time, many of Trump's fellow Republicans may find it difficult to support a deal perceived as overly favorable to Iran.
Summary perspective
The tentative memorandum and the surrounding military activity underscore the fragility of any ceasefire and the narrow window for follow-on negotiations. The draft terms, as described, aim to reopen one of the world's most sensitive maritime chokepoints and set a timetable for addressing nuclear issues, while leaving several key strategic disputes - including control of the strait, the disposition of Iran's nuclear material, and Israel's role in the region - unresolved or contested.