Overview
The US and Iran signed a 14-point Memorandum of Understanding to end hostilities and reopen the Strait of Hormuz. Iran agreed to dilute its enriched uranium stockpile, while the US will lift all sanctions and support a $300 billion reconstruction fund. A final deal must be struck within 60 days.
A Historic Truce
On 17 June 2026, President Donald Trump and Iranian President Masoud Pezeshkian formally signed a Memorandum of Understanding (MoU) to end the war in the Gulf. The agreement, titled the "Islamabad Memorandum of Understanding," was made public after concerns that its text had not been released. The deal brings an immediate end to hostilities and reopens the strategic Strait of Hormuz. Here is a breakdown of the 14 points agreed upon by both nations.
What is the Memorandum of Understanding?
The MoU is a preliminary framework agreement that sets the stage for a final peace deal. Both sides have committed to striking a final agreement within 60 days. The document outlines key commitments from both nations to end the conflict and restore normal relations.
Key Clauses of the 14-Point Agreement
1. An End to Conflict 'On All Fronts'
The US and Iran, along with their allies, declared an immediate and permanent termination of military operations on all fronts, including in Lebanon. Both nations agreed not to start any war against each other, and to abstain from threatening or using any kind of force. They also committed to maintaining the territorial integrity and sovereignty of Lebanon.
2. Respect for Internal Affairs
Both countries pledged to refrain from interfering in each other's internal affairs, out of respect for sovereignty and territorial integrity.
3. 60-Day Deadline for Final Deal
Both sides committed to finalising a comprehensive peace deal within 60 days. The deadline can be extended only with mutual consent.
4. US Blockade to End
The US will begin removing its naval blockade and all hindrances imposed on Iranian ports. The blockade will fully end within 30 days. Traffic in the Gulf waters during this period will be restored to pre-war levels. The US will also remove its forces close to Iran within 30 days.
5. Strait of Hormuz
Iran will "make arrangements using its best efforts" to allow safe movement of commercial vessels through the Strait of Hormuz with zero charge. This is a crucial point, as the strait is a vital oil shipping route.
6. US $300 Billion Rebuild Promise
The US, along with regional partners, agreed to a plan for the reconstruction and economic development of Iran with a fund of at least $300 billion. The framework for implementation will be finalised in the next 60 days. The US will grant all required licenses and waivers for the relevant financial transactions.
7. Lifting of Sanctions on Iran
The US promised to lift all kinds of sanctions imposed on Iran, including UN Security Council resolutions, IAEA Board of Governors resolutions, and all unilateral US sanctions. The schedule for lifting sanctions will be agreed upon as part of the final deal.
8. Iran's 'No Nuclear Weapons' Promise
Iran promised not to "procure or develop" nuclear weapons. The two nations agreed to resolve the disposition of stockpiled enriched material under the supervision of the IAEA. The final agreement will also discuss the issue of enrichment and other matters related to Iran's nuclear requirements.
9. Both Countries to Maintain Status Quo
Until the final deal is signed, the US and Iran will maintain the status quo. Iran will maintain the current status quo in its nuclear programme, while the US will refrain from imposing new sanctions and will not deploy additional forces near Iran.
10. Waivers on Iranian Exports
Until sanctions are terminated, the US Treasury Department will issue waivers on the export of Iranian crude oil, petroleum products, and all associated services, including transportation, insurance, and banking transactions.
11. Iran's Assets to Be Unfrozen
The US will make Iran's frozen or restricted funds and assets available for use upon implementation of the memorandum. The release of funds will be mutually agreed upon during negotiations.
12. Mechanism for Successful Implementation
Both countries agreed to establish an executive mechanism to monitor the successful implementation of the MoU and future compliance with the final deal.
13. Negotiations for Final Deal
Negotiations for the final deal will start once the implementation of key points (points 1, 4, 5, 10, and 11) begins.
14. Final Deal to Be Endorsed by UNSC
The final deal between the two countries will be endorsed by a binding United Nations Security Council resolution.
A Human Touch: The End of Conflict
For ordinary Iranians and Americans, this agreement brings hope. Iranian families who have suffered under sanctions and conflict can look forward to economic relief and reconstruction. American families with loved ones deployed in the region can hope for their safe return. The reopening of the Strait of Hormuz will stabilise global oil prices, benefiting consumers worldwide. As one Iranian citizen said, "We are tired of war. We want to build a future for our children." This sentiment is shared by many on both sides.
Exam-Focused Points
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Agreement name: Islamabad Memorandum of Understanding (MoU).
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Date signed: 17 June 2026.
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Signatories: US President Donald Trump and Iranian President Masoud Pezeshkian.
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Duration: 60-day deadline for final deal.
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Key commitments: Iran dilutes enriched uranium stockpile; US lifts all sanctions.
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Reconstruction fund: $300 billion for Iran's economic development.
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Strait of Hormuz: To be reopened with zero charge for commercial vessels.
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US naval blockade: To end within 30 days.
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Iran's nuclear promise: No procurement or development of nuclear weapons.
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Final deal: To be endorsed by a binding UN Security Council resolution.
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Supervision: IAEA will oversee nuclear-related provisions.
Frequently Asked Questions (FAQ)
Q1: What is the Iran-US Memorandum of Understanding?
A: It is a 14-point preliminary agreement signed by the US and Iran to end hostilities, reopen the Strait of Hormuz, and set the stage for a final peace deal within 60 days.
Q2: When was the agreement signed?
A: The agreement was signed on 17 June 2026 by US President Donald Trump and Iranian President Masoud Pezeshkian.
Q3: What happens to the US naval blockade?
A: The US will begin removing its naval blockade immediately and fully end it within 30 days.
Q4: Will Iran have to stop its nuclear programme?
A: Iran has promised not to procure or develop nuclear weapons. The disposal of its enriched uranium stockpile will be supervised by the IAEA.
Q5: How will the final deal be enforced?
A: The final agreement will be endorsed by a binding United Nations Security Council resolution.