Officials involved in the negotiations say a new draft memorandum of understanding between the US and Iran is under discussion, and that it is closer to gaining approval from both sides than any previous version. President Trump has not yet signed off. Iran's supreme leadership has not publicly confirmed its approval either.
What the draft contains
The one-page, 14-point memorandum is being negotiated between Trump's envoys Steve Witkoff and Jared Kushner and several Iranian officials, both directly and through mediators. In its current form, it would declare an end to the war in the region and open a 30-day period of negotiations on a detailed agreement covering the Strait of Hormuz, Iran's nuclear programme, and US sanctions.
The agreement is also expected to carry a regional dimension. Iranian officials and diplomats briefed on the talks said it would include a halt to fighting in Lebanon, where Israel has continued operations against Hezbollah despite a ceasefire formally in place there. Two diplomats described the preliminary terms as covering an initial 60-day period with the possibility of extension. The version described by an Iranian official to the New York Times, however, goes further: a declaration of the end of war on all fronts for the full duration of negotiations, not merely a temporary halt.
Because negotiations have been conducted through Pakistani and Qatari intermediaries, it has never been fully clear whether Washington and Tehran have been working from the same document, or who on the Iranian side holds sufficient authority to signal genuine agreement.
The Strait remains the central obstacle
Iran began controlling traffic through the Strait of Hormuz and charging tolls of over $1 million per vessel after the war began. Following the failure of the Islamabad talks, the US Navy imposed its own blockade of Iranian ports from 13 April, creating what observers described as a dual blockade. The strait, through which roughly a fifth of the world's oil and gas passed before the war, has remained the most combustible point of the negotiations.
US officials say the draft memorandum would see the Strait of Hormuz fully opened over 60 days, with Iran loosening its grip on the waterway and the US pulling back its naval blockade in synchronised steps until the strait returns to its pre-war status. The Iranian version of the deal, as described to the New York Times by an Iranian official, would see the US blockade lifted within 30 days, with the strait opened for the full duration of the talks. Washington has placed no time frame on the blockade's removal.
A further complication is Tehran's insistence that Iran and Oman, whose territory borders the strait, retain the right to impose some form of service fee on passing vessels after any initial reopening period. Trump repeated publicly this week that the international waterway must remain open to all without tolls or fees. Some US negotiators have proposed pushing the longer-term status of the strait into a second round of talks to avoid it blocking progress on the preliminary deal.
A reconstruction fund, and the politics of cash
The idea of an investment fund for Iran originated with Witkoff and Kushner, both former real estate businessmen, who reportedly proposed Tehran real estate development projects and an investment fund as part of any final deal. In response, Iran suggested that major US companies, including oil and energy firms, could enter Iran to pursue investments and joint ventures.
The Iranian official cited by the New York Times and one diplomat put the figure at $300 billion, describing it as a reconstruction programme to be promised in the event of a final agreement. Iran had earlier demanded reparations for bombardment damage that some of its officials estimate at between $300 billion and $1 trillion. Two diplomats briefed on the latest draft called it an international investment fund that the United States would help facilitate, with details to be worked out during negotiations. No other officials involved in the mediation confirmed the $300 billion figure.
The question of frozen assets carries its own political weight in Washington. Iran has an estimated $24 billion of its own funds frozen in banks abroad and has insisted that meaningful negotiations cannot begin without their release. US officials have been using the phrase "No dust, no dollars" to describe Trump's position: the stockpile of highly enriched uranium must be handed over or destroyed before Washington meets Tehran's financial demands. Trump has also made clear to aides that he will not sign any deal that can be characterised as direct cash payments to Iran, a politically toxic comparison to the Obama administration's 2015 transfer of $1.7 billion to Tehran in settlement of a decades-old financial dispute.
Nuclear talks deferred, not resolved
The draft memorandum includes commitments from Iran never to pursue nuclear weapons and to negotiate over a suspension of its uranium enrichment programme and the removal of its stockpile of highly enriched uranium. Those negotiations would constitute the second, more substantive phase of any process, not the preliminary agreement now under discussion.
Iran currently holds approximately 970 pounds of uranium enriched to near-weapons grade, along with ten tonnes of material enriched to lower levels. Trump initially demanded the stockpile be sent to the United States. This week he indicated some flexibility, saying that diluting the enrichment under international inspectors, or transferring it to a third country, would also be acceptable. On Wednesday, however, he said he was not comfortable with either Russia or China taking it.
Vice President JD Vance told reporters on Thursday that the two countries were still negotiating over "a couple of language points" and that it was hard to say exactly when, or whether, Trump would sign the memorandum. Both sides have indicated a deal could be announced as early as this weekend. Both sides have said the same before.
The pressure to agree
Diplomats involved in the talks have said that the longer the haggling continues, the more the risk of fresh military exchanges grows, and that those exchanges directly threaten the broader diplomatic effort. Republican senators Roger Wicker and Lindsey Graham have both expressed caution about Trump making a peace deal with Iran, with Graham raising concerns about Iran being perceived as a force requiring a diplomatic solution rather than a defeated one. Former secretary of state Mike Pompeo called the reported terms "not remotely America First."
The political cross-currents on both sides of the negotiation are real. What is also real is the economic pressure. Around 130 million barrels of crude oil and 46 million barrels of refined fuels are currently stranded on roughly 200 tankers in the region, unable to transit the strait, according to analytics firm Kpler. Every week the memorandum remains unsigned, that pressure compounds.
Source: The New York Times, Axios, CNN
