A memorandum between the United States and Iran to halt the war in the Gulf could be signed as soon as Sunday, a source told Reuters on Friday, with Geneva emerging as the most likely venue. The development sent global stock markets higher and pushed oil prices lower, with Brent crude falling more than 2% in European morning trading.
The source said the text of the memorandum was still being finalised and that Iran was holding firm on its demand that any deal must also end fighting in Lebanon, where Israel has been battling Hezbollah. The aim was to complete the final wording by Saturday, with US Vice President JD Vance and Iran's Parliament Speaker Mohammed Baqer Qalibaf expected to sign the agreement. No venue had been officially confirmed but Geneva was the leading candidate.
Trump announced on Thursday that he was calling off new strikes on Iran because a deal was ready. "We just made a great settlement of the war with Iran," he told reporters at the White House. "The strait will officially open as soon as we sign, which could be soon, very soon, maybe over the weekend in Europe," he added, saying that when asked whether Iran's Supreme Leader Ayatollah Mojtaba Khamenei had approved the deal, he understood the answer to be yes.
The terms as described by Iranian officials on Friday, however, appear to offer Tehran much of what it has demanded throughout the conflict, with Trump appearing to secure little beyond the reopening of the Strait of Hormuz, which Iran closed after he ordered the initial strikes in February. A senior Iranian source told Reuters the draft would waive sanctions on Iranian oil, unfreeze billions of dollars in frozen Iranian assets, and require a full cessation of hostilities on all fronts, including Lebanon. Iran's state-affiliated Mehr news agency reported the terms also included a US commitment to withdraw its forces from around Iran and present a reconstruction plan worth at least $300 billion. Nuclear issues would be set aside for later negotiations. Washington has sought a guarantee that Iran never develops a nuclear weapon; Tehran says it is not pursuing one. The source made no mention of what Iran would offer in return, and there was no immediate response from the US government.
The war began on 28 February 2026 with US and Israeli strikes on Iran. Throughout the conflict, Trump has on multiple occasions declared that a deal was imminent, only for negotiations to stall. Markets nonetheless drew comfort from his latest words, which came after one of the most intense periods of escalation since hostilities began: Iran and Israel exchanged fire for the first time since an April ceasefire, followed by two days of fresh US strikes on Iran and Iranian retaliatory strikes on US regional bases. On Thursday alone, Iran declared the full closure of the Strait of Hormuz to all vessels, warning that any ship attempting to pass would be targeted.
Tension around the strait remained high on Friday. US forces shot down two Iranian attack drones after Tehran attempted to strike commercial ships transiting the waterway, a US official said. Iranian media also reported the sound of explosions early Friday, and Iranian forces stopped at least one tanker from transiting the strait.
The conflict has become a significant political liability for Trump domestically, with polls showing his approval ratings falling amid voter anger over high petrol prices. Some Republicans have openly warned that the war's unpopularity could cost them control of Congress in November's midterm elections.
A deal that includes a halt to fighting in Lebanon is likely to create difficulties with Israel, which launched the war alongside the United States in February but has been excluded from the peace negotiations. Prime Minister Benjamin Netanyahu's office said in a statement that Israel was not a party to any memorandum of understanding with Iran.
Source: Reuters
