The US and Iran are preparing to formally sign an interim peace agreement in Geneva on Friday (June 19), with both sides portraying the deal as a strategic breakthrough, according to diplomatic sources and media reports on Wednesday.

The agreement, described as a memorandum of understanding (MoU), is expected to open a 60-day negotiating window focused on Iran’s nuclear programme, regional security issues, sanctions relief, and the broader framework of future US-Iran relations.

However, key details of the accord remain shrouded in mystery, with several versions circulating and significant discrepancies existing in US and Iranian interpretations of the draft text.

Key framework provisions

According to reports, the near-final 14-point draft framework includes provisions for an immediate ceasefire, sanctions relief, and broader de-escalation measures.

The draft is also reported to include steps for the reopening of the Strait of Hormuz for commercial shipping and temporary sanctions waivers, especially those linked to Iranian oil exports, during the negotiation period.

A senior US official has also indicated that sanctions on Iranian oil exports could be waived under the arrangement, potentially increasing global supply.

The MoU is expected to extend an earlier ceasefire by 60 days, allowing both sides to work toward a more permanent settlement.

Both sides claim gains

Both Washington and Tehran are presenting the emerging deal as a political win.

The United States has emphasised limits on Iran’s nuclear ambitions and says the arrangement does not involve direct US taxpayer funding, with reconstruction reportedly to be supported by external regional partners.

Iran, meanwhile, is said to be highlighting sanctions relief, economic benefits, and recognition of its sovereignty under the agreement.

Reports also suggest the framework could include a reconstruction fund worth up to $300 billion, financed by Gulf states, contingent on Iranian compliance with future terms.

Nuclear issue and unresolved disputes

The agreement reportedly reiterates that Iran will not develop nuclear weapons, while US officials say further negotiations may address the removal or reduction of Iran’s enriched uranium stockpile.

However, Iran’s nuclear programme, missile capabilities, and support for its proxies in the region do not appear to be fully resolved within the interim framework, leaving several contentious issues for future talks.

Uncertainty over implementation

Despite the diplomatic push, the draft agreement remains an interim work and non-final framework, with implementation timelines and enforcement mechanisms still unclear.

Analysts say questions remain over how quickly measures such as sanctions relief or the reopening of key shipping routes would be carried out, as well as whether both sides can maintain trust during the 60-day negotiation period.

The deal follows months of backchannel diplomacy, and the coming weeks are expected to be critical in determining whether the interim arrangement can evolve into a lasting settlement.