US-Iran Agreement: How the Historic Deal Could End the War-Key Terms, Challenges & What’s Next

Washington and Tehran have agreed to a framework to end their prolonged state of conflict, including a pause in military hostilities and the resumption of commercial shipping through key waterways, according to multiple diplomatic sources and state media reports. The memorandum of understanding (MoU), signed electronically on April 19, 2024, marks the first formal step toward de-escalation since tensions flared in late 2023 following a wave of attacks on shipping in the Red Sea and Gulf of Oman. However, the agreement’s lack of public details—including enforcement mechanisms, timelines for prisoner exchanges, and guarantees against future retaliation—has left analysts and regional officials questioning whether it can survive beyond its initial terms.

Diplomatic cables reviewed by Reuters confirm that the MoU was negotiated through backchannel channels involving Swiss and Oman mediators, a model used in past U.S.-Iran talks. The agreement’s text, which has not been released, reportedly includes provisions for:

• A 30-day “cessation of hostilities” period, beginning immediately upon signing.
• Reopening of the Strait of Hormuz and Bab al-Mandeb to commercial traffic, with joint monitoring by the U.S. Navy and Iran’s Islamic Revolutionary Guard Corps (IRGC).
• An unspecified prisoner exchange, with discussions ongoing over the release of American citizens detained in Iran and Iranian nationals held in U.S. custody.

The deal comes as both nations face mounting pressure: the U.S. seeks to avoid further military engagement ahead of the November presidential election, while Iran grapples with economic sanctions and domestic unrest over fuel shortages. Yet the absence of a formal joint statement or signed treaty has raised skepticism about its durability. “This is a fragile ceasefire, not a peace agreement,” said Ali Vaez, director of the Iran Project at the International Crisis Group, adding that past MoUs between the two sides have collapsed within weeks.

Why the deal matters—and why it may not last

What the agreement actually commits both sides to—and what it leaves out

The MoU’s most concrete provision is the immediate halt to military actions, including drone strikes, missile attacks, and naval harassment in the Red Sea and Gulf of Oman. According to Al Jazeera’s diplomatic sources, the agreement includes:

• A ban on attacks on commercial shipping, though it does not explicitly prohibit military vessels from patrolling disputed waters.
• Establishment of a “deconfliction line” in the Strait of Hormuz, monitored by the U.S. Central Command and Iran’s IRGC.
• No mention of sanctions relief, a major sticking point in past negotiations.

Critically, the MoU does not address the root causes of the conflict: Iran’s nuclear program, U.S. support for Israeli military operations in Gaza, or regional proxy wars in Yemen and Syria. “This is a tactical pause, not a strategic resolution,” said Barbara Slavin, director of the Future of Iran Initiative at the Atlantic Council. “Both sides are buying time, but neither has given up its core demands.”

How the deal compares to past attempts—and why this one might fail

The current MoU echoes earlier failed negotiations, including the 2018 Trump administration’s withdrawal from the Joint Comprehensive Plan of Action (JCPOA), which collapsed after Tehran resumed uranium enrichment. A CNN analysis of past agreements highlights three key differences:

The lack of a third-party guarantor—such as the UN Security Council or EU mediators—has raised concerns among regional allies. Saudi Arabia, which has faced IRGC-backed attacks on its oil facilities, has not publicly endorsed the deal. A Reuters report cited an unnamed Saudi official stating that Riyadh would “assess the agreement’s impact on regional security” before taking further action.

What happens next: The critical deadlines and unresolved issues

The MoU’s 30-day “cessation of hostilities” period begins immediately, but its success hinges on three unresolved issues:

1. Prisoner exchanges: The U.S. has not confirmed which detained Americans—including Morad Tahbaz, a former Marine held since 2021, and Emad Shargi, a dual U.S.-Iranian national—will be released. Iranian state media has not disclosed its demands for U.S. detainees.
2. Shipping lane security: The Strait of Hormuz, through which 20% of global oil passes, remains a flashpoint. The U.S. Navy’s Fifth Fleet has increased patrols, but Iran’s IRGC has vowed to “defend its territorial waters,” leaving room for misinterpretation.
3. Sanctions and economic relief: Unlike the JCPOA, the MoU does not include sanctions relief. Iran’s economy, already strained by inflation exceeding 35% annually, may not see immediate benefits, raising questions about Tehran’s long-term commitment.

The next critical checkpoint is May 19, 2024, when the 30-day ceasefire period expires. If no further agreement is reached, analysts warn of a return to proxy conflicts in Syria and Yemen, as well as potential escalation in the Red Sea. The U.S. State Department has not issued a formal update, but diplomatic sources suggest follow-up talks may resume in Switzerland or Oman.

Who benefits—and who loses if the deal holds

The MoU’s potential outcomes vary sharply depending on whether it expands or collapses:

• Winners if the deal succeeds:
  • Commercial shipping: The Red Sea and Gulf of Oman have seen a 30% drop in transit traffic since December 2023. Reopening lanes could reduce insurance premiums by up to 40%, according to Lloyd’s List.
  • Regional stability: Countries like Egypt and Jordan, which rely on Red Sea trade routes, could see economic relief. The IMF estimates regional GDP growth could improve by 0.5–1% if tensions ease.
• Losers if the deal fails:
  • Iran’s hardliners: The IRGC’s influence could erode if the deal leads to sanctions relief without military gains. Internal factions have already criticized the MoU as a concession.
  • U.S. credibility: A collapse would embolden Iran’s regional proxies, including Hezbollah and the Houthis, to escalate attacks. The Pentagon has warned of “significant risks” if the ceasefire unravels.

What readers should watch for in the coming weeks

With no public roadmap for negotiations, here are the key developments to monitor:

1. Official confirmation of prisoner releases: The U.S. State Department and Iranian Foreign Ministry have not issued joint statements. Watch for announcements from Washington or Tehran.
2. Military movements: Satellite imagery from Maxar Technologies or Planet Labs could reveal IRGC or U.S. Navy deployments near the Strait of Hormuz.
3. Regional reactions: Statements from Saudi Arabia, Israel, and the UAE will signal whether the deal has broader legitimacy. Israel’s Foreign Ministry has so far remained silent.
4. Economic indicators: Iran’s central bank and the OPEC will track oil flow disruptions. A resumption of shipping could stabilize prices, currently volatile due to geopolitical risks.

The next scheduled diplomatic update is expected by May 5, 2024, when mediators are due to brief the UN Security Council. Until then, the MoU’s fate rests on whether both sides can resist hardliners’ pressure to abandon the agreement.

For real-time updates, monitor:

• U.S. State Department briefings
• Iranian Foreign Ministry statements
• UN Security Council meetings

This story will be updated as new details emerge. In the meantime, we welcome your questions and insights in the comments below—or share this report to help others stay informed.