The United States and Iran signalled on Friday that a deal to end their war may be close, even as the two sides appeared to disagree sharply over what the emerging agreement actually contains.
Pakistan, which has been involved in mediation efforts for weeks, said the final text of a peace agreement had been completed, though there was no immediate confirmation from Washington or Tehran.
“Pakistan is now working closely with both sides to finalise the next steps,” Prime Minister Shehbaz Sharif said in a post on X.
The comments came after leaked accounts of a proposed memorandum of understanding, described by Western, Pakistani and Iranian sources, appeared to grant Tehran several of its core demands. The reported terms drew an angry response from US President Donald Trump, who dismissed them as inaccurate.
“The terms that Iran leaked out to the Fake News have NOTHING to do with the terms that were agreed to, in writing,” Trump wrote on Truth Social, calling the Iranians “very dishonorable people to deal with.”
But shortly after that statement, Trump reposted comments from Iranian Foreign Minister Abbas Araqchi, who said a memorandum to end the war had “never been closer,” while warning against speculation before the text is finalised.
A Western source said one of the remaining sticking points was wording related to ending hostilities in Lebanon, where Iran has demanded a halt to Israeli operations against Hezbollah.
According to versions of the text described to Reuters by several sources, Washington would begin unfreezing billions of dollars in Iranian assets and waive sanctions on Iranian oil exports in exchange for Tehran reopening the Strait of Hormuz.
The reported text would also delay negotiations over Iran’s nuclear programme for a 60-day period, open discussions over possible reparations to Tehran, and drop, at least for now, long-standing US demands for limits on Iran’s missile programme.
The versions described by Reuters did not include any reference to Iran giving up its stockpile of highly enriched uranium, a demand Washington had previously insisted on. Sources said the issue had been explicitly left out of the current draft.
A senior US official, however, gave a very different account of the agreement, saying Iran’s uranium stockpile “will be destroyed and removed” and that its nuclear programme would be dismantled.
“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.”
Vice President JD Vance also rejected claims that Iran would receive immediate financial relief, saying no funds would be released merely for signing a deal or attending talks.
“First, the Iranians are not receiving any cash, and no funds are being released for simply signing a deal or attending a meeting,” Vance wrote on X.
A Western source said the memorandum could be signed as early as Sunday if the remaining language is agreed, with Geneva currently viewed as the most likely venue. The source said Vance and Iran’s parliament speaker Mohammad Baqer Qalibaf could be the signatories.
Israel, which launched the war alongside the United States, has not been included in the negotiations. Prime Minister Benjamin Netanyahu said Israel would not be a party to the memorandum.
Netanyahu has clashed with Trump in recent weeks over US pressure on Israel to reduce military action in Lebanon to give Washington room to secure an agreement with Tehran.
Israel’s defence minister said Israel would not withdraw from territory in Lebanon. A senior Israeli official said Israel expects any deal to preserve the current Lebanon ceasefire framework, including Israel’s freedom to act against what it describes as threats in areas under its control.
The signs of progress came after a week of renewed escalation in the Gulf, with Israel and Iran exchanging fire and the United States carrying out two days of strikes on Iranian targets. Iran responded by firing at US bases.
Markets reacted positively to Trump’s announcement that a deal was close. Global shares rose, while Brent crude fell more than 3 percent to its lowest level in nearly two months.
The conflict has become a growing political problem for Trump, with polls showing falling approval ratings amid public anger over rising gasoline prices.
Some Republicans fear the war’s unpopularity could hurt the party in November’s midterm elections, though many within the party remain hawkish on Iran and may resist any agreement seen as offering Tehran major concessions.
Iran has long insisted its nuclear programme is peaceful. Under the 2015 nuclear deal with the Obama administration, Tehran accepted limits on its nuclear activity in exchange for sanctions relief.
Trump withdrew from that agreement during his first term in 2018. Iran later expanded uranium enrichment and built up a stockpile of more than 400 kilograms of material enriched close to weapons-grade levels.