Washington DC

Even as Iranian authorities continue to dismiss reports of a finalised agreement with the United States as speculative, diplomatic sources indicate that Tehran and Washington are moving closer to signing a memorandum of understanding aimed at easing tensions in West Asia.

According to CNN, Geneva is emerging as the preferred venue for the signing ceremony, although Vienna has also been mentioned as a possible location. Sources familiar with the negotiations said the proposed memorandum would mark the beginning of a new phase of diplomatic engagement focused on implementing the terms of the agreement.

The anticipated deal follows recent remarks by US President Donald Trump, who suggested that a significant breakthrough had been achieved in efforts to end the conflict involving Iran. Speaking at the White House, Trump expressed optimism that the remaining documentation could be completed within days and indicated that a formal signing ceremony might take place in Europe. He also suggested that Vice President JD Vance could represent the United States at the event.

Trump further stated that the Strait of Hormuz could be reopened shortly after the agreement is signed, crediting Special Envoy Steve Witkoff for his role in advancing negotiations.

CNN reported that some diplomatic sources have referred to the proposed arrangement as the "Islamabad Agreement" or "Islamabad Declaration," reflecting Pakistan's role in facilitating dialogue between the two sides. However, no official name for the agreement has yet been confirmed.

Diplomatic sources told CNN that the draft understanding includes an extension of the current ceasefire, the reopening of the Strait of Hormuz, and the establishment of a framework for future discussions on Iran's nuclear programme. The text of the memorandum is reportedly agreed upon in principle, although final approval is still pending.

Under the proposed terms, a 60-day ceasefire would come into effect immediately after signing and would apply across multiple theatres, including Lebanon. The agreement also envisions the restoration of unrestricted maritime traffic through the Strait of Hormuz without additional transit fees imposed by Iran. Shipping activity is expected to gradually return to pre-conflict levels within a month of implementation.

The framework reportedly includes the easing of certain US restrictions on Iranian ports and limited sanctions relief. Diplomatic sources indicated that any sanctions concessions would depend on continued compliance and constructive engagement by both sides, although no detailed timetable has been disclosed.

Regarding the nuclear issue, sources said the proposed arrangement addresses key American concerns by incorporating commitments related to preventing Iran from acquiring nuclear weapons and managing its stockpile of highly enriched uranium. However, it remains unclear whether the agreement addresses Tehran's demand for the release of frozen Iranian assets.

Despite these reports, Iran's Foreign Ministry has maintained that no final agreement has been concluded. Foreign Ministry spokesperson Esmail Baghaei, speaking to Iranian state media, said negotiations remain ongoing and emphasised that reports suggesting a completed deal are premature.

Baghaei acknowledged the mediation efforts of Qatar and Pakistan but argued that progress had been complicated by what Tehran views as shifting positions from the United States during the talks. He said that while much of the draft text had already been agreed upon, Washington had repeatedly altered its stance throughout the negotiation process.

Reaffirming Iran's position, Baghaei stressed that Tehran would not compromise on issues it considers fundamental national interests or "red lines."

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Meanwhile, Pakistan welcomed recent diplomatic progress. In a statement, Pakistan's Foreign Ministry said Foreign Minister Muhammad Ishaq Dar discussed developments in the Iran-US dialogue with European Union foreign policy chief Kaja Kallas. Both sides reportedly expressed satisfaction with the progress achieved through continued diplomatic engagement and voiced hope that ongoing efforts would ultimately result in a lasting and peaceful resolution.