Hopes for deal to end Iran war grow, but nuclear issues unresolved

Follow our live coverage here.

WASHINGTON/DUBAI – Optimism rose on April 16 that the Middle East war may be nearing an end after a Pakistani mediator made progress on “sticky issues”, though Iran said questions concerning its nuclear programme remain unresolved.

US and Iranian negotiators have scaled back ambitions for a comprehensive peace deal and are instead seeking a temporary memorandum to prevent a return to conflict, two Iranian sources told Reuters.

The shift follows last weekend’s inconclusive talks in Islamabad, where deep differences over Iran’s nuclear programme, including the fate of its enriched uranium stockpiles and how long Tehran should halt nuclear work, have continued to threaten progress.

A senior Iranian official said the two sides have started to narrow some gaps, including over how to manage the Strait of Hormuz, a vital route for about 20 per cent of the world’s oil and gas needs that has been closed to most ships for weeks.

Iran, which has faced crippling US sanctions for years, wants a memorandum to include Washington unfreezing some Iranian funds, in return for allowing more ships through the strait, said the senior official, who asked not to be named because of the sensitivity of the matter.

If a memorandum to halt the conflict is reached, the two sides are expected to have 60 days to negotiate a final deal, which would require the involvement of experts and the International Atomic Energy Agency (IAEA), the Iranian sources said.

The United States and Pakistan have signalled growing prospects for a deal in the more than six-week conflict, with US President Donald Trump saying an accord will reopen the Strait of Hormuz.

The waterway’s closure has triggered a historic oil shock and prompted the International Monetary Fund to cut its global outlook, warning that a prolonged conflict could tip the world towards recession.

On April 16, US Defence Secretary Pete Hegseth said the US would blockade Iranian ports for “as long as it takes” and restart combat operations immediately if Iran does not agree to a peace deal.

“You, Iran, can choose a prosperous future, a golden bridge, and we hope that you do for the people of Iran,” Mr Hegseth said during a news briefing at the Pentagon. “But if Iran chooses poorly, then they will have a blockade and bombs dropping on infrastructure, power and energy.”

Mr Hegseth, addressing the Iranian leadership, said “this is not a fair fight, and we know what military assets you are moving and where you are moving them to”.

General Dan ​Caine, chairman of the US Joint Chiefs of Staff, said US forces were “ready to resume major combat operations at literally a moment’s notice”.

Fundamental differences

Pakistan’s army chief and a key figure in the mediation, Field Marshal Asim Munir, arrived in Tehran on April 15 to try to prevent a renewal of the conflict after marathon talks held in Islamabad last weekend ended without a deal.

A senior Iranian official told Reuters on April 16 that the trip has led to greater hopes for a second round of talks and an extension of the two-week ceasefire.

Fundamental differences, however, remain over Iran’s nuclear programme, he said.

The issue of a ceasefire in Lebanon, where Israel has been waging a parallel campaign against the Iran-backed militant group Hezbollah, will also be an essential component of any peace talks, Pakistan said.

Israel’s Cabinet met on April 15 to discuss a possible ceasefire in Lebanon, a senior Israeli official said, while Mr Trump announced the leaders of the two countries would speak for the first time in decades.

Two senior Lebanese officials said they had been briefed that efforts were under way for a ceasefire but had no further details on how long it would last or when it would be announced.

“It has been a long time since the two leaders have spoken, like 34 years. It will happen tomorrow. Nice!” Mr Trump wrote in a social media post.

Israeli Prime Minister Benjamin Netanyahu will speak with Lebanese President Joseph Aoun, Ms Gila Gamliel, a member of Israel’s security Cabinet, told Israel’s Army Radio on April 16.

Stock markets have rallied strongly in recent days on expectations of a swift resolution to the fighting, with global equities vaulting past their previous all-time highs in Asian trading on April 16. Indexes on Wall Street hit record highs on April 15 as crude oil prices steadied.

‘Feeling good’

“We feel good about the prospects of a deal,” White House press secretary Karoline Leavitt said at a news conference, describing the Pakistan-mediated discussions as “productive and ongoing”.

She denied reports that the US formally requested an extension of the two-week ceasefire agreed by the two sides on April 8.

More in-person talks have yet to be confirmed but will likely take place in Pakistan again, Ms Leavitt said.

Mr Mohammad Eslami, head of the Atomic Energy Organisation of Iran, said talks need to recognise Iran’s rights, interests and dignity to be fruitful.

“But if it continues, as it usually does, relying on deception and, in fact, on a lack of commitment and failure to adhere to agreements and set terms, then it naturally cannot succeed,” he said during a pro-government rally in Tehran.

The war broke out with US-Israeli attacks on Iran on Feb 28, triggering Iranian attacks on Iran’s Gulf neighbours, as well as reigniting the Israel-Hezbollah conflict.

Thousands of people have been killed, mostly in Iran and Lebanon, while soaring energy costs have rattled investors and policymakers around the world.

Iran’s nuclear ambitions were a key sticking point at last weekend’s talks.

The US proposed a 20-year suspension of all nuclear activity by Iran – an apparent concession from longstanding demands for a permanent ban – while Tehran suggested a halt of three to five years, according to people familiar with the proposals.

Washington has also pressed for any enriched nuclear material to be removed from Iran, while Tehran has demanded that international sanctions against it be lifted.

A separate source told Reuters that Iran has agreed to dilute its highly enriched uranium under the supervision of the IAEA and the US.

Economic pressure on Iran

The war has led Iran to effectively shut the Strait of Hormuz – a vital artery for global crude and gas shipments – to all but its own vessels, sharply reducing Gulf exports and leaving energy importers scrambling for alternative supplies.

Iran’s joint military command warned it would halt trade flows in the Gulf, the Sea of Oman and the Red Sea, which connects to the Suez Canal, if the US blockade continues.

Iran could consider allowing ships to sail freely through the Omani side of the strait without risk of attack as part of proposals it has offered in negotiations with the US, provided that a deal is clinched to prevent renewed conflict, a source briefed by Tehran said.

On April 16, the US Navy said in an advisory it had widened its shipping blockade on Iran to include cargoes deemed contraband.

Any vessel suspected of trying to reach Iranian territory will be “subject to belligerent right to visit and search”, it said.

“These vessels, regardless of location, are subject to visit, board, search and seizure.”

The navy said contraband items include weapons, weapons systems, ammunition, nuclear materials, crude and refined oil products, as well as iron, steel and aluminium.

During the first 48 hours of the US blockade on ships entering and exiting Iranian ports, no vessels made it past US forces, the US military said.

Additionally, nine vessels complied with directions from US forces to turn around and return to an Iranian port or coastal area. REUTERS