From Hormuz to Islamabad: The Anatomy of the US–Iran Peace Deal

Patrick Li, Jayden Yoon, & Aditya Doizhode — July 7 , 2026

On February 28th, the United States and Israel—following weeks of military buildup and threats—attacked Iran, killing Supreme Leader Ayatollah Khamenei in the process. Following this, Iran retaliated, striking several U.S. military facilities in the region, including civilian infrastructure in America-aligned Gulf states. Simultaneously, the Iranian government began blockading the Strait of Hormuz, a major supply chain chokepoint. As of now, however, a 14-point memorandum of understanding has been signed in an effort to end the war. It’s important to recognize the buildup to the conflict, what stipulations are included in this pact, and the future geopolitical implications of this swift and polarizing intervention.

The Buildup

The 2023 outbreak of Israel’s war in Gaza significantly escalated tensions between Iran and Israel. As Israel’s military incursions in both Lebanon and Gaza became increasingly frequent, Iran-backed militant groups—namely Hamas and Hezbollah—began strikes on Israeli and American military sites. This resulted in more than two hundred attacks on Israeli and U.S. targets in Iraq and Syria. In direct response to this aggression, the U.S. ordered strikes on 87 Iranian facilities on both October 26, 2023 and February 2, 2024.

Source: CriticalThreats

In mid-late 2024, the conflict shifted from indirect proxy confrontation to more direct exchanges between Israel and Iran. On April 1st, an alleged Israeli air strike on an Iranian consulate building in Damascus, Syria, killed 2 generals and 5 military advisors. In retaliation, Iran launched its first-ever direct attack on Israel, consisting of over 300 cruise missiles, drones, and ballistic missiles. In response to the killings of Hamas and Hezbollah leaders, Iran initiated a further barrage of over 180 strikes on Israel in October of 2024. Despite this retaliation, the elimination of Hamas and Hezbollah’s upper leadership—in tandem with the fall of Bashar-Al-Assad’s Syria—resulted in a significantly weakened Iranian front.

In 2025, President Donald Trump returned to office and significantly ramped up pressure against Tehran. By signing the NSPM-2 (National Security Presidential Memorandum-2), he imposed sweeping sanctions on any companies and port operators that did business with Iran, and directed agencies to freeze Iranian funds and oil access. In mid April, American and Iranian diplomats met for the first reported time in 3 years, centering talks on denuclearization in exchange for sanctions relief. Ultimately, however, nothing substantive emerged from the discussions.

Over the next year, the conflict hardened into open warfare. On February 28th, Israel and the U.S. began striking Iran in what the Trump administration dubbed “Operation Epic Fury.” By mid-to-late March, the war had become commonplace. Retaliatory strikes were being traded daily, and shipping via the Strait of Hormuz had come to a near total standstill. Most notably, the Strait-induced shortage of oil (a deficit of nearly 14% of global supply) sent the price of Brent crude up nearly 30%.

Source: CSIS

On April 11-12, Pakistan mediated the “Islamabad talks,” in which three rounds of negotiations for peace totaled 21 hours. The U.S. demanded for Iran to permanently end all uranium enrichment, surrender its current stockpile, cease virtually all support for local militia groups (namely the Houthis and Hezbollah), and open the Strait of Hormuz without any imposed toll. Iran demanded for immediate unfreezing of assets, a ceasing of U.S. and Israeli strikes, and ultimate sovereignty over the Strait of Hormuz (while reserving the ability to toll patrons to whatever degree). In the end, neither nation was able to meet the other’s demands. Despite the Islamabad talks, the conflict has persisted and the death toll currently stands at over 7,000. Now, however, peace talks have hesitantly resumed.

The 14 Point Peace Plan

On June 17, 2026, the United States and Iran agreed to a ceasefire and a reopening of the Strait of Hormuz after 4 months of conflict, with a new Memorandum of Understanding (MOU) issued. Titled the “Islamabad Memorandum of Understanding between the United States of America and the Islamic Republic of Iran,” the document was signed and released to the public. However, different implications within the 14 points prevail, with much overlap and a broader scope of negotiations. In short, the 14-point peace plan is essentially a framework for ending the war and stabilizing U.S.–Iran relations, rather than a detailed peace treaty. It focuses on four major areas:

Security and Ending the Conflict – Highlighted in points 1, 2, 9, 12, and 13 is a permanent ceasefire and an end to all military operations in both countries. Many of these provisions also mention mutual respect of sovereignty and a non-interference pact. Additionally, the plan would have both countries maintain their respective status quos; the U.S. would add no sanctions or troops and Iran would be forced to freeze its nuclear program until further negotiations are set. The final agreement will be backed by a binding United Nations Security Council (UNSC) resolution.

Trade, Shipping, and Economic Recovery – Outlined in points 4, 5, 6, 7, 10, and 11 is the United States’ intention to support Iran’s reconstruction efforts by restoring trade and removing economic restrictions. Included in the MoU is the opening of the Strait of Hormuz, the chokepoint of roughly 25% of the world’s Brent crude oil. Before the conflict, 15 million barrels of oil per day transited the strait. Accordingly, the strait’s blockade shot up oil prices to a peak of $126 per barrel of crude oil. The peace plan introduces at least $300 billion in reconstruction efforts and economic assistance. The release of billions of dollars in frozen Iranian assets and the resumption of oil exports are intended to restore Iran’s access to international markets and provide resources to rebuild the nation’s economy and destroyed infrastructure.

Iran’s Nuclear Program – Points 8 & 9 detail plans to prevent Iran from developing nuclear weapons, while also preserving a peaceful civilian nuclear program under international oversight. Iran has reaffirmed that it will not pursue nuclear weapons and has agreed to negotiate the future of its enriched uranium stockpile, with any reduction or processing of nuclear material supervised by the International Atomic Energy Agency (IAEA, point 8). During the 60-day negotiation period, Iran has agreed to freeze its nuclear program at its current level, while the United States has pledged not to deploy additional military forces in the region (point 9). The goal is to build trust between the two countries while negotiators work toward a permanent nuclear agreement. This issue is central to the peace plan, as Iran’s stockpile of 60% enriched uranium has grown to over 400 kilograms. While this is far above what is needed for civilian nuclear power, it is still safely below the 90% enrichment generally considered weapons-grade. Still, the IAEA has stated that if further enriched, that amount of material could theoretically be sufficient for multiple nuclear weapons, making international monitoring a key priority. Under the plan, all decisions regarding Iran’s enriched uranium would be subject to IAEA verification and inspection, further ensuring that reductions or changes to the stockpile are independently monitored. The peace plan also provides a 60-day negotiation window to determine the long-term future of Iran’s enrichment program, balancing Iran’s stated right to peaceful nuclear energy with international concerns about nuclear proliferation.

Negotiating Permanent Peace – Points 1, 3, 12, 13, and 14 highlight the process for turning the temporary ceasefire into a legally binding, long-term peace agreement. The memorandum begins with an immediate and permanent ceasefire between the United States and Iran, with the intention of extending that commitment to all fronts of the conflict, including Lebanon. Both sides have agreed to negotiate a comprehensive peace treaty within 60 days, create a joint mechanism to ensure both countries comply, and submit a final, binding agreement for UNSC approval. Since Iran has long supported Hezbollah, which has engaged in cross-border fighting with Israel, the agreement to end the military operations of all parties involved is meant to reduce violence across the broader region, rather than only between Washington and Tehran. While the MOU does not create a separate peace agreement between Israel and Lebanon, it seeks to reduce the risk that fighting between Hezbollah and Israel will intensify.

Geopolitical Implications

Adherence to the outlined provisions would mean the end of the war and a mutual promise from both sides “to respect each other’s sovereignty and territorial integrity and to refrain from interfering in each other’s internal affairs.”

Aside from a reduction in offensive hostilities, naval blockades have ceased and commercial vessels have resumed transit through the Strait of Hormuz. The deal is likely to be internationally impactful and produce benefits for both nations.

Still, certain issues remain unresolved. One example is the status of Iran’s nuclear program. While the Iranian government has agreed on paper to “not procure or develop nuclear weapons,” Emily Harding of the Center for Strategic & International Studies warns that “such promises…have proven hollow in the past.”

Adding on to this skepticism, there are signs that Iran is already breaking its promise. A secretive site in the Zagros Mountains, named Pickaxe Mountain, has been blocked off to inspectors from the International Atomic Energy Agency and “is casting serious doubt on Iran’s willingness to abide by the terms of the memorandum of understanding….”

Moreover, there was less specificity on Iran’s funding of terrorist groups. While the first point of the peace deal did note that Iran and its allies would terminate its military operations on all fronts, it’s still unclear whether this actually will translate to less funding for terrorism. Regardless, Iran has managed to retain its own offensive arsenal. In June, an analysis found that the nation had not only been able to keep 70% of the missile stockpiles that they had had before the war, but that the country was repairing “damage to the majority of its underground missile facilities.”

Ultimately, due to the nature of compromise, neither the U.S. nor Iran is likely to walk away from the peace deal completely satisfied. Still, both sides stand far more to gain from cooperation than they stand to lose.

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