US and Iran signal a peace deal is close

The United States and Iran signalled on Friday that an agreement to end their war was close, with a senior US administration official saying a text was in place that both sides like.

Iran's decision-making bodies were meeting to discuss the memorandum, the country's foreign ministry spokesperson said.

Pakistan, which has for weeks sought to broker a deal, said a final text of a peace agreement between the United States and Iran had been reached.

"Pakistan is now working closely with both sides to finalise the next steps," Prime Minister Shehbaz Sharif said in a post on X.

Leaked terms of the proposed memorandum of understanding outlined by Western, Pakistani and Iranian sources on Friday appeared to favour Iran, drawing criticism from US President Donald Trump, who called the reports inaccurate.

Trump said leaked comments on a deal did not represent what had been agreed to.

"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 his Truth Social platform.

"Very dishonorable people to deal with," he said of the Iranians.

However, shortly afterwards, Trump reposted a social media post by Iranian Foreign Minister Abbas Araqchi, in which Araqchi said a memorandum to end the war had never been closer - and also warned against speculation over its contents until it was finalised.

WHAT'S IN THE DEAL?

Under the terms of the text described by other sources to Reuters, the US would immediately begin providing Iran with billions of dollars in unfrozen assets, and waive sanctions on its oil exports, in return for Iran opening the strait.

Discussion of Iran's nuclear programme would be set aside for a 60-day period of talks on a final settlement, there would be a discussion of war reparations to Tehran, and the dropping of longstanding demands for curbs on Iran's missile programme, the sources said.

Washington has previously demanded Iran give up its stockpile of highly enriched uranium. But none of the versions of the text reviewed by Reuters includes mention of it, and the sources said the demand had been explicitly excluded for now.

But a senior US official, describing the agreement, said that the uranium stockpile "will be destroyed and removed" and Iran's 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 said on X: "First, the Iranians are not receiving any cash, and no funds are being released for simply signing a deal or attending a meeting."

The deal ensures economic benefits would only flow to Iran if it meets its obligations under the agreement, he said.

ISRAEL NOT PARTY TO MEMORANDUM

A Western source said that if language can be agreed, the memorandum could be signed as soon as Sunday by Vance and Iran's parliament speaker, Mohammad Baqer Qalibaf, with Geneva for now seen as the likeliest venue.

Despite jointly launching the war with the United States, Israel has so far been excluded from the negotiations, and Prime Minister Benjamin Netanyahu said his country would not be party to the memorandum.

Netanyahu has repeatedly clashed with Trump in recent weeks over US demands that Israel curb military action in Lebanon to let Washington reach a deal 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 maintain the Lebanon ceasefire in its current form, with Israel maintaining freedom to act against what it deems threats in areas under its control.

OIL PRICE FALLS

Signs of a deal emerged at the end of a week that saw the biggest escalation in the Gulf since a ceasefire halted US and Israeli attacks on Iran in April.

Israel and Iran traded fire and Washington then launched two days of strikes on Iran, triggering return fire on US bases.

Trump's announcement of a deal prompted global shares to rally and oil prices to slip. Brent crude prices were down more than 3 per cent to their lowest in nearly two months.

The conflict has become a political headache for the White House, with polls showing Trump's approval ratings sinking amid voter anger over high gasoline prices.

Some Republicans worry that the war's unpopularity could cost them control of Congress in November's midterm elections. But many Republicans hold hawkish positions on Iran and could have difficulty endorsing an agreement viewed as yielding concessions.

Tehran, which has always insisted its nuclear programme is peaceful, accepted tight curbs on it in return for the lifting of sanctions under a 2015 agreement with the administration of then-US President Barack Obama.

Trump abandoned that deal during his first term in 2018 and Iran responded by ramping up its enrichment of uranium, producing more than 400 kg (around 900 pounds) of material at close to the purity needed to make a bomb.