Any agreement to prolong the ceasefire between the US and Iran could also lower tensions in Lebanon
People ride motorcycles near a billboard featuring an image of the late Supreme Leader of Iran, Ayatollah Ali Khamenei, in Tehran, Iran, May 6, 2026.PHOTO:REUTERS
The United States and Iran are edging toward a limited, temporary agreement to halt their war, sources and officials said on Thursday, with a draft framework that would stop the fighting but leave the most contentious issues unresolved.
The emerging plan centres on a short-term memorandum rather than a comprehensive peace deal, underscoring deep divisions between the two sides and signalling that it would be an interim step.
Hopes that even a partial deal could lead to the reopening of the Strait of Hormuz have already moved markets, with global stocks approaching record highs on Thursday and oil prices nursing steep losses on bets that supply disruptions could ease.
Tehran and Washington have scaled back ambitions for a sweeping settlement as differences persist, particularly over Iran’s nuclear programme — including the fate of its highly enriched uranium stockpiles and how long Tehran would halt nuclear work.
Read More: No ships pass through Strait of Hormuz in last 24 hours amid rising security risks
Instead, they are working toward a temporary arrangement aimed at preventing a return to conflict and stabilising shipping through the strait, the sources and officials said.
“Our priority is that they announce a permanent end to war and the rest of the issues could be thrashed out once they get back to direct talks,” a senior Pakistani official involved in mediation between the two sides told Reuters.
The proposed framework would unfold in three stages: formally ending the war, resolving the crisis in the Strait of Hormuz and launching a 30-day window for negotiations on a broader agreement, according to the sources and officials.
“We remain optimistic,” Tahir Andrabi, foreign ministry spokesperson of mediator Pakistan, told a briefing in Islamabad on Thursday when asked how quickly a deal could come.
“A simple answer would be that we expect an agreement sooner rather than later.”
Trump optimistic, Iran skeptical
US President Donald Trump – who has repeatedly played up the prospect of a breakthrough since the war began on February 28 with U.S.-Israeli strikes on Iran – has also struck an optimistic tone.
“They want to make a deal… it’s very possible,” he told reporters at the White House on Wednesday, adding later that “it’ll be over quickly.”
The proposal would formally end the conflict in which full-scale warfare was paused by a ceasefire announced on April 7. But it leaves unresolved key US demands that Iran suspend its nuclear work and reopen the Strait of Hormuz, the sources said.
Israel, which has also been fighting Iran-backed Hezbollah in Lebanon, said on Thursday it had killed a Hezbollah commander in an airstrike on Beirut a day earlier, the first Israeli attack on the Lebanese capital since a ceasefire there was agreed last month.
Hezbollah triggered its latest conflict with Israel by opening fire in support of Iran on March 2. A halt to Israeli strikes in Lebanon is another key Iranian demand in Tehran’s negotiations with Washington.
Iranian officials signalled scepticism over the US proposal to end the wider war. A foreign ministry spokesperson said Tehran would respond in due course, while lawmaker Ebrahim Rezaei described the proposal as “more of an American wish-list than a reality.”
Also Read: Fresh Israeli strikes kill 3 in southern Lebanon in violation of ‘ceasefire’
Iran’s parliament speaker Mohammad Baqer Qalibaf appeared to mock reports that indicated the two sides were close, writing on social media that “Operation Trust Me Bro failed” and portraying the talks as US spin after its failure to reopen the strait.
Deal hopes drive oil down, shares rise
Reports of a possible agreement pushed Brent crude down by 3% to around $98 a barrel, having tumbled nearly 8% on Wednesday.
Global share prices also rose and bond yields fell on optimism about an end to a war that has disrupted energy supplies.
“The contents of the US-Iran peace proposals are thin, but there is an expectation in the market that further military action will not take place,” said Takamasa Ikeda, a senior portfolio manager at GCI Asset Management.
Military, regional tensions
Trump on Tuesday paused a two-day-old naval mission, opens new tab aimed at reopening the blockaded strait, citing progress in talks.
NBC News, citing two unnamed US officials, said Trump decided on the pause after Saudi Arabia suspended the US military’s ability to use a Saudi base for the operation.
Saudi officials were surprised and angered by Trump’s announcement that the US would help escort ships through the Strait, leading them to tell Washington they would deny the US permission to fly military aircraft out of a Saudi base or through Saudi airspace, NBC reported.
The White House did not immediately respond to a request for comment on the report.
The US military has kept up its own blockade on Iranian ships in the region. US Central Command said forces fired at an unladen Iranian-flagged oil tanker on Wednesday, disabling the vessel as it attempted to sail toward an Iranian port.
Key demands left out
The source briefed on the mediation said the US negotiations were being led by Trump’s envoy Steve Witkoff and son-in-law Jared Kushner. If both sides agreed on the preliminary deal, that would start the clock on 30 days of detailed negotiations to reach a full agreement.
The sources said the memorandum did not mention several key demands Washington has made in the past, which Iran has rejected, such as limits on Iran’s missile programme and an end to its support for proxy militias in the Middle East, including Hezbollah.
The sources also made no mention of Iran’s existing stockpile of more than 400 kg (900 pounds) of near-weapons-grade uranium — one of Washington’s central concerns.
The United States was waiting on Thursday for Iran to respond to its latest proposed deal to end the war in the Middle East and to reopen the key shipping lane out of the Gulf.
World capitals and markets were also waiting for Tehran to respond.
Asian stocks soared and oil prices fell after US President Donald Trump said once again that an agreement could be near after positive talks, and Iran said it would pass on its latest position to mediator Pakistan.
Any agreement to prolong the ceasefire between the US and Iran could also lower tensions in Lebanon, where an already fragile truce with Israel was under renewed strain after a strike on southern Beirut killed a Hezbollah commander.
The war, launched by the US and Israel in late February, has seen Iran respond with attacks across the Middle East and impose a chokehold on the Strait of Hormuz, the gateway to the Gulf oil and gas industries and a strategic trade route.
Trump had this week briefly launched a naval operation to escort commercial vessels and force open the strait, only to stand it down within hours, citing progress on negotiations with Iran, which have been mediated by Pakistan and supported by Washington’s Gulf Arab allies.
In Iran, however, many were wary of increased repression as the war drags on.
Read More: Trump’s reversal on reopening Strait of Hormuz came after backlash from ally: NBC report
“The economic situation got worse, and this government has become even more brutal,” 49-year-old Ali told AFP journalists in Paris from the Iranian city of Tonekabon, using only his first name for fear of retribution.
‘Under review’
“We’ve had very good talks over the last 24 hours, and it’s very possible that we’ll make a deal,” Trump told reporters on Wednesday, adding his now habitual threat to return to bombing if Tehran refuses to back down to US demands.
Iran’s foreign ministry spokesman Esmaeil Baqaei said the US proposal remained “under review” and Tehran would communicate its position to mediator Pakistan “after finalising its views”.
According to a report from US network NBC News, Trump’s U-turn came after Saudi Arabia, whose Crown Prince Mohammed bin Salman reportedly talked directly to Trump, refused to allow US forces to use its airspace and bases for the Hormuz operation.
US news outlet Axios, citing two officials, reported that both Tehran and Washington were close to an agreement on a one-page memorandum of understanding to end the war and set a framework for negotiations on Iran’s nuclear programme.
Trump has claimed that Iran’s leadership is divided in the wake of the deaths of many senior figures in US and Israeli strikes.
But President Masoud Pezeshkian said today he had met with the country’s supreme leader, Mojtaba Khamenei, who has not been seen in public since his appointment in early March.
“What struck me most during this meeting was the vision and the humble and sincere approach of the supreme leader of the Islamic revolution,” Pezeshkian said, in a video broadcast by state television.
Khamenei, reportedly wounded in strikes on the first day of the Middle East war that claimed the life of his father and predecessor, Ali Khamenei, has released only written statements since his appointment.
Oil prices fall
Oil prices fell again, tumbling by 2%, having fallen around 10% over the previous two days, and Tokyo’s Nikkei index led another strong rally across Asian stocks, fuelled by revived optimism that the talks will bear fruit.
Energy prices are still much higher than before the conflict, but international standard Brent and US benchmark West Texas Intermediate are both now below the symbolic $100 level.
Markets have been particularly concerned about the Strait of Hormuz, which in peacetime carries a fifth of the world’s oil and LNG trade as well as a good chunk of its fertiliser.
On the Lebanese front, Israel struck Beirut’s southern suburbs on Wednesday in the first such attack in nearly a month, killing a senior Hezbollah commander from its elite Radwan force.
In a video released by his office, Israel’s Prime Minister Benjamin Netanyahu said: “I say to our enemies in the clearest possible terms: no terrorist is immune. Anyone who threatens the State of Israel will die because of his actions.”
The Israeli military said in a statement today that an “explosive drone impact” had wounded four of its soldiers, one severely, in southern Lebanon the previous day.
