Few had expected the technical negotiations between the United States and Iran, launched following the memorandum of understanding (MoU) signed roughly two weeks ago to bring an end to nearly 100 days of hostilities, to proceed without friction or contention.
Yet even fewer anticipated the emergence of deep-seated disagreements so early in the process, raising the prospect that the agreement could unravel and revive the risk of military confrontation between the United States and Iran.
Although these disputes, centring on the administration of the Strait of Hormuz, the allocation of Iran’s unfrozen financial assets, and developments in Lebanon, have not derailed the negotiations, they underscore the difficult path ahead. More importantly, they reinforce persistent doubts over whether the current process can yield a durable strategic accommodation between Tehran and Washington.
Those doubts are amplified by a growing conviction within Iran’s military and security establishment that Washington’s objective extends well beyond reshaping the regional order into one of managed coexistence, even if an uneasy and intensely competitive one.
Instead, many in Tehran believe the United States seeks to methodically erode Iran’s regional influence and dismantle its strategic leverage piece by piece, offering sanctions relief and access to frozen assets only as inducements for a gradual contraction of its geopolitical position.
The 14-point Islamabad memorandum of understanding (MoU) is an interim framework intended to halt active hostilities and create a pathway towards a comprehensive US-Iran agreement within 60 days. Its core provisions include an immediate and permanent ceasefire on all fronts (including Lebanon), mutual commitments to refrain from the use of force, and respect for sovereignty and non-interference in internal affairs.
The memorandum further establishes a framework for addressing the conflict’s economic and nuclear dimensions. It provides for the gradual lifting of US and international sanctions, the release of frozen Iranian assets, and support for Iran’s reconstruction and economic recovery.
Rather than resolving these issues immediately, the memorandum defers key details to a future final agreement, functioning as a confidence-building roadmap rather than a definitive peace treaty.
However, within days of its signing, Tehran and Washington began advancing fundamentally incompatible interpretations of what had been agreed.
One of the reasons for the divergence is that the MoU was drafted with deliberate ambiguity to secure signatures. Its broad language allowed each side to present the agreement as a diplomatic victory domestically. Yet the same ambiguity that enabled a ceasefire has since become the principal driver of renewed confrontation.
A central and immediate point of contention emerged over Article 5 concerning the Strait of Hormuz, a vital corridor through which roughly 20 per cent of global oil flows. While the agreement stipulated that Iran would facilitate safe passage for commercial vessels and remove obstacles within 30 days, the two sides diverged sharply on implementation.
Iran asserted that the article granted it full supervisory authority over the strait during the initial 30-day period and rejected external interference, with Foreign Minister Abbas Araghchi warning that unilateral actions would escalate tensions. The United States insisted instead that the MoU guaranteed full reopening without Iranian-imposed fees or restrictions, viewing any disruption as a breach.
Tensions intensified when Iran objected to US coordination with Oman on alternative shipping routes and warned vessels to use only a northern corridor within Iranian territorial waters.
The dispute escalated into a cycle of reciprocal military escalation. On 26 June, the US Central Command (CENTCOM) carried out airstrikes on Iranian targets, including missile depots and coastal radar installations, in retaliation for an Iranian drone strike on the Singapore-flagged cargo vessel Ever Lovely.
Washington described the action as a “powerful response” to “unprovoked aggression”. The following day, after another Iranian drone struck the Panama-flagged tanker M/T Kiku, US forces launched a second wave of strikes targeting Iranian surveillance, communications, and air-defence infrastructure near the strait.
In response, the Islamic Revolutionary Guard Corps (IRGC) launched attacks on US interests in the Gulf, including ballistic missile and drone strikes on the Ali Al- Salem Air Base in Kuwait and the US Fifth Fleet headquarters in Bahrain. The IRGC warned that further US escalation would trigger stronger retaliation and could collapse the diplomatic process entirely.
Iran insists that its actions in the Strait of Hormuz are intended to safeguard freedom of navigation and that it alone is responsible for mine-clearing operations in the waterway. It further maintains that imposing transit fees on vessels is a legitimate measure, given the costly services it provides.
On Monday, Kazem Gharibabadi warned against “further complicating the situation” in the strait, while Foreign Ministry Spokesperson Esmaeil Baghaei denied that technical negotiations with Washington had resumed. Tehran announced the suspension of technical talks, demanding full implementation of the memorandum’s obligations before any further negotiations could proceed.
“The current priority for the Islamic Republic of Iran is ensuring the implementation of the terms of the memorandum of understanding, and we are seriously pursuing our demands in this regard,” Baghaei stated.
OTHER COMMITMENTS: Regarding US commitments under Clause 10 of the agreement (oil sales), Baghaei noted that Washington “has issued the necessary permits, and we are monitoring the implementation process”.
“As for Clause 11 (the release of frozen Iranian assets), its implementation is also being pursued; in this context, a delegation of experts from the Islamic Republic of Iran will be dispatched to Doha this week.”
On Monday, Iranian President Masoud Pezeshkian announced that $6 billion out of a total of $12 billion in frozen Iranian assets held in Qatar would be released and repatriated to Iran under the Islamabad agreement. He added that efforts were ongoing to recover the remaining funds.
Pezeshkian described the agreement as a “significant achievement for the Iranian people” and a “major victory”, emphasising that it included the easing of restrictions on oil and petrochemical exports. The frozen assets in Qatar originated from oil revenues previously held in South Korean banks and were transferred to Qatar in 2023 as part of a prisoner-exchange arrangement between Tehran and Washington, earmarked for humanitarian purchases.
Baghaei denied that negotiations for a final agreement had begun, explaining that “we have not yet entered the negotiation phase for a final agreement; according to Article 13 of the MoU, the commencement of negotiations for a final agreement is contingent upon the start of the implementation of Article 1 (cessation of hostilities on all fronts), Article 4 (lifting the US naval blockade on Iran), and Article 5 (Iran facilitating freedom of navigation in the Strait of Hormuz).”
Tehran stated that it will adopt a “sequential bargaining” approach and will not move to Phase B before completing Phase A.
Another major dispute emerged over Iran’s frozen assets, with senior US officials suggesting the funds could be used to purchase American agricultural goods. This was firmly rejected by Iran’s Parliament Speaker Mohammad Bagher Ghalibaf, who insisted that Iran would deploy the assets strictly according to national priorities without external conditions.
The Lebanon front exposed an even deeper structural rift in interpretation. For Washington, the MoU represents a general cessation of hostilities and a framework for compartmentalised diplomacy, with Lebanon treated as a separate track. Tehran, by contrast, views Lebanon as inseparable from the broader regional settlement, insisting that Israeli withdrawal from occupied territory is an unconditional pillar of the agreement.
The rift intensified when the United States announced a separate Israeli-Lebanese arrangement under American auspices. That deal proposed a phased Israeli withdrawal conditioned on Hizbullah’s disarmament, establishment of a demilitarised zone, US-led verification mechanisms, and Israeli reconnaissance overflights.
Washington framed it as stabilising Israel’s northern border and complementary to the MoU. Tehran denounced it as a unilateral rewrite of commitments, arguing it introduced conditions never agreed upon while privileging Israeli security demands.
A prominent Iranian politician who served under former president Mohammad Khatami and is familiar with elite deliberations told Al-Ahram Weekly that recent developments suggest Washington is attempting to “strategically exhaust” Iran under the cover of negotiations while gradually stripping it of leverage.
He argued that since the MoU’s signing, Washington has reinterpreted provisions in line with its own strategic vision, bypassing the agreement’s spirit and creating new facts on the ground by isolating the Lebanon front.
Iranian leaders, thus, fear that Lebanon has become a testing ground for the broader framework, as American policymakers continue to view compartmentalised diplomacy as a necessary tool of leverage, while Tehran rejects such an approach outright.
The Iranian politician further contended that the United States and Israel are seeking to achieve through diplomacy what they failed to secure militarily: constraining Iran’s regional reach and disarming Hizbullah under joint oversight, without a fixed timetable for Israeli withdrawal from Lebanese territory.
In his view, Israel is being positioned as the arbiter of Hizbullah’s disarmament, with the broader objective of drawing Lebanon into the Abraham Accords architecture and transforming Southern Lebanon into a demilitarised security zone with a legitimised Israeli military presence under the pretext of border protection.
“What Washington is effectively doing”, he said, “is dismantling the so-called ‘Axis of Resistance,’ fragmenting its fronts, and severing the link between Iran and its allies, particularly Hizbullah, while offering Tehran economic incentives such as sanctions relief and access to frozen assets.”
He warned the strategy could deepen internal fractures in both Iran and Lebanon. Inside Iran, he described a deepening split between reformists and pragmatists who prioritise avoiding renewed war and securing economic relief for a strained public and hardline factions aligned with the Islamic Revolutionary Guard Corps.
The latter, deeply sceptical of any understanding with Washington, argue that the promised economic gains are merely a trap designed to induce Iran to abandon the pillars of its national security doctrine: its regional allies, which raise the cost of any confrontation with Iran; its nuclear programme, viewed as both a national right and a source of pride; and its ballistic missile programme, regarded as an essential deterrent.
Iranian sources have stated that Revolutionary Guard commanders and senior conservative politicians have already warned Pezeshkian against exchanging these strategic assets for short-term economic benefits.
Thus, the legacy of past diplomatic breakdowns continues to shape Iranian decision-making, reinforcing doubts about whether any agreement with the United States can endure.
Recent developments suggest both capitals are still attempting to define the post-war environment before comprehensive negotiations crystallise the memorandum’s meaning. Therefore, the war may have ended. The struggle over the future architecture of the Middle East has not.
* A version of this article appears in print in the 2 July, 2026 edition of Al-Ahram Weekly.
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