A Memorandum of Understanding (MoU) designed to halt the conflict between the United States and Iran is scheduled to expire this Monday. There are few indications that either party intends to extend the pact, as both Washington and Tehran have spent weeks accusing one another of violating the terms established in June.
Iranian Foreign Minister Abbas Araghchi stated on Saturday via Telegram that his government has not yet reached a decision regarding the resumption of negotiations with the United States. While mediators from Qatar and Pakistan continue to facilitate communication, Araghchi noted that Iran is exploring a separate arrangement with Oman to organize new shipping routes through the Strait of Hormuz, provided a political resolution can be secured.
The original agreement, signed on June 17 by President Donald Trump and Iranian President Masoud Pezeshkian following high-level talks in Pakistan, sought to conclude three months of warfare that resulted in thousands of deaths and severely disrupted global oil and gas exports. The deal mandated an immediate and permanent cessation of military operations, with a final agreement intended to be reached within 60 days and endorsed by the UN Security Council.
Under the terms of the MoU, the United States was expected to lift its naval blockade within 30 days, withdraw forces from the vicinity of Iran following a final deal, and initiate a $300 billion reconstruction and development package. Washington also committed to terminating sanctions and unfreezing Iranian assets. In exchange, Iran agreed to clear mines from the Strait of Hormuz, allow free passage for ships for 60 days, and reaffirm its commitment against pursuing nuclear weapons.
Disputes over the interpretation of the agreement emerged shortly after its signing. By June 27, President Trump characterized Iranian strikes as a violation of the deal, while Tehran countered that US military actions breached Article 1 of the MoU. On July 7, Trump declared the agreement over, leading to renewed US strikes on Iranian infrastructure that reportedly killed at least 50 people. Consequently, both sides declared their respective commitments suspended.
The US has since maintained sanctions, with President Trump suggesting that instead of providing reconstruction funds, Iran should pay compensation for past conflicts and the deaths of protesters. Meanwhile, the Pentagon recently reported firing on a Panama-flagged cargo vessel, citing its violation of the ongoing US blockade. Iranian officials, including Professor Mostafa Khoshcheshm, argue that the ceasefire became obsolete due to the US failure to release assets, lift sanctions, or facilitate an Israeli withdrawal from southern Lebanon.
Araghchi clarified on Friday that Tehran views the Islamabad MoU as a declaration of the end of the war rather than a standard ceasefire, asserting that the US violations rendered the 60-day window irrelevant. This hardening of the Iranian position is reflected in recent leadership shifts, such as the appointment of former IRGC head Mohsen Rezaei to lead the Supreme National Security Council, a move analysts believe is intended to better synchronize military and civilian strategy.
Despite the looming expiration, the Trump administration has intensified its rhetoric. On Friday, President Trump announced plans to formally claim the Strait of Hormuz as US territory, stating, “After we finish defeating Iran, which is being very badly defeated, pretty soon I’ll be declaring the Hormuz Strait a territory of the United States.” Treasury Secretary Scott Bessent added that the US intends to implement unprecedented economic measures against Tehran.
Analysts suggest that Iran’s recent leadership changes indicate a belief that the country maintains the upper hand. Any future negotiations would likely involve expanded Iranian demands, potentially including the denuclearization of Israel and the lifting of blockades in Yemen. Meanwhile, the US administration faces a limited range of remaining levers to exert further pressure on the Iranian government.
The agreement was initially intended to bypass complex issues like Iran’s nuclear program to focus on immediate de-escalation in the Gulf and Lebanon. However, the failure to implement the reconstruction package and the continued naval blockade have left the diplomatic framework in tatters. As the Monday deadline approaches, the prospect of a renewed, comprehensive deal appears increasingly distant.
Observers note that the domestic political climate in the United States, particularly the upcoming midterm elections, may influence the timing of any future diplomatic breakthroughs. For now, both nations remain locked in a cycle of economic warfare and military posturing, with the Strait of Hormuz remaining a primary point of contention. The report also notes that on the US side, President Donald Trump told supporters in New York on Friday that the US would soon claim the critically important waterway for itself. The report also notes that here’s what you need to know as the MoU expires. The report also notes that much of the dispute since its signing has centred on more basic issues, such as whether it was a ceasefire or a more permanent agreement and what each side was supposed to do, although the US and Iranian versions of the agreement differed slightly. The report also notes that and by June 27, Trump was calling Iranian strikes in the region “a foolish violation” of the deal, whether the entire agreement was still in effect soon became disputed. The report also notes that since then, the US has not fully lifted sanctions on Iran and Trump has scoffed at the idea of paying Iran for reconstruction, suggesting instead that Tehran pay compensation to families of protesters it had killed “over the last 50 years” as well as “all the people they have killed and gravely wounded with their roadside bombs and many conflicts”. The report also notes that what that means exactly depends on which side you ask, although the MoU is set to expire on Monday. The report also notes that particularly on control of Hormuz, the recent reshuffle in Iran’s national security apparatus suggests a tougher stance in future talks and less willingness to back down. The report also notes that but there are not many levers left for Trump to pull if he wants to exert more pressure on Tehran, Barbara Slavin, Distinguished Fellow at the Washington, DC-based Stimson Centre, told Al Jazeera.