The memorandum is therefore a pause rather than a peace settlement. It establishes a 60-day negotiating period, freezes the nuclear status quo, suspends new American sanctions, and provides for commercial passage through the Strait of Hormuz and the staged ending of the blockade. That said, it remains fragile.
For Iran, this pause came at a critical moment. The fighting destroyed infrastructure, disrupted commerce, and placed new pressure on the state budget. Yet the Islamic Republic did not collapse. It proved more resilient than many had predicted. Its institutions continued to function, the security establishment remained broadly united, and the state retained enough military power to impose serious costs on its enemies. The war exposed weakness, but not disintegration, at least not yet.
However, the leadership will now present survival as a victory. Iranian officials have repeatedly argued that their country resisted a superior enemy and forced Washington to negotiate. But wartime nationalism cannot indefinitely conceal economic hardship. Once the immediate danger recedes, Iranians will again ask whether prices will fall, jobs will return, and personal freedoms will ever exist in a country ruled by clerics for 47 years.
Economic recovery is far from guaranteed. Reuters reported that earlier drafts included the possible release of restricted funds and temporary oil-sanctions waivers, yet these measures remain conditional. Even if cash begins to flow, ordinary Iranians may not benefit. The Revolutionary Guards, clerics, and politically sponsored companies control large sections of the economy and will compete for reconstruction contracts.
Iran is also unlikely to abandon Hezbollah, the Houthis, or allied groups in Iraq. What may change is how these proxies are used. Tehran wants to prevent them from provoking another war while negotiations continue. They may become less active without being dismantled, preserved as instruments of pressure if the agreement collapses.
The most important change concerns how the regime will function after Ali Khamenei’s death and the succession of his son Mojtaba, ending an era that lasted from 1989 to 2026. We still know little about whether Khamenei Jr., politically or physically, can lead the country through the gravest challenge to the regime since 1979. The Revolutionary Guards played a central role in elevating the new supreme leader, but their future relationship remains uncertain.
Mojtaba lacks his father’s experience, clerical authority, and control over the state’s competing factions. His position will depend more heavily on the Guards, the security agencies, and bargaining among powerful institutions. The question is therefore not simply whether the Islamic Republic will survive, but what kind of Islamic Republic will survive.
Three general scenarios seem to lie in the future for Iran’s Islamic regime. The first, and probably most likely in the short term, is securitized continuity. Mojtaba Khamenei would remain the formal center of the system, but the Revolutionary Guards would exercise greater influence over defense, foreign policy, internal security, and reconstruction. Elections and clerical institutions would continue, but their real weight would decline. This would not necessarily mean formal military rule. The constitutional structure and religious language would remain, but the system would depend more heavily on the security establishment. The Guards would present themselves as defenders not only of the revolution, but of the nation. Nationalism, military sacrifice, and resistance to foreign domination would become more important sources of legitimacy.
The second scenario is controlled adaptation. The regime’s senior political and security leadership may decide that permanent confrontation with the United States and Israel has become too costly, giving President Masoud Pezeshkian, economic officials, and pragmatic conservatives more room to negotiate abroad and reform parts of the economy. Some social restrictions could be eased, not because the regime has become democratic, but because it needs a new social contract. That contract would offer greater economic opportunity and calculated personal freedom in exchange for political obedience.
History shows, however, that economic opening creates expectations. Business groups demand predictable laws, the middle class demands greater freedom, and younger Iranians may insist that economic opening be accompanied by greater social freedom and political participation. Too little reform may satisfy no one; too much could weaken the controls on which the regime depends.
The third possible scenario is a renewed crisis. Negotiations may fail, sanctions relief may prove too limited, or another regional confrontation may begin. Iran’s allies could provoke renewed fighting, or Washington and Israel could conclude that Tehran is merely using the pause to rebuild its missile and nuclear capabilities. A further danger is that Washington and Israel may no longer agree on how to handle Iran. Recent Israeli operations in Lebanon, despite Washington’s effort to preserve the memorandum, have already revealed a serious gap between the two allies. If Israel resumes major operations while the United States still backs the agreement, the split could undermine the ceasefire and drag all sides back toward war.
A crisis could also emerge from within the regime. The Guards, clerics, technocrats, hardliners, and presidency do not always share the same interests. Some benefit from confrontation, while others need sanctions relief and foreign investment. If the agreement’s rewards fail to materialize, hardliners may accuse the government of surrendering strategic leverage without receiving meaningful compensation. Public protest would become especially dangerous if it coincided with divisions inside the ruling elite. The regime can suppress large demonstrations while the security establishment remains united. The greater threat would be economic anger combined with elite fragmentation and cracks inside the coercive institutions.
The Islamabad Memorandum has given the Islamic Republic something valuable: time. But time is not a solution. The most likely outcome is neither democratization nor immediate collapse. It is the survival of the Islamic Republic in a different form: more dependent on the Revolutionary Guards, more nationalist in its rhetoric, perhaps more pragmatic abroad, but still authoritarian at home. The agreement may have preserved the Iranian state; whether it can preserve the political order established in 1979 remains to be seen.
*The writer is an associate professor of international politics at the Josef Korbel School of Global and Public Affairs and the associate director of the Centre for Middle East Studies at the University of Denver.
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