The Islamabad MOU at Six Weeks: Why the Iran-US Deal Is Already Under Strain Before Talks Have Begun

Six weeks after US President Donald Trump and Iranian President Masoud Pezeshkian remotely signed the Islamabad Memorandum of Understanding to end the Iran War, the agreement has achieved its most visible ambition — halting large-scale military operations and partially reopening the Strait of Hormuz — but has failed to resolve the structural disputes that made the war possible. The MOU, a 14-point framework signed on June 17 following months of Pakistan-mediated talks, commits both parties to a 60-day ceasefire extendable by mutual consent, during which negotiations are meant to address Iran's nuclear programme, uranium enrichment levels, sanctions relief, and the unfreezing of Iranian assets. The UK House of Commons Library confirmed the text sets out plans for talks including freedom of navigation in the strait, Iran's nuclear and missile programmes, and sanctions. The Atlantic Council's assessment was characteristically sober: the MOU will most likely temporarily reduce violence and increase maritime traffic while providing parties more time to hammer out details, but it does not resolve core issues surrounding the mechanics of the Strait of Hormuz, Iranian nuclear concessions, or financial incentives and sanctions relief.

The nuclear dimension is the most technically demanding and politically explosive element of the second phase. The CSIS noted that Iran's ability to reconstitute its military depends on its ability to import key materials and equipment, and that policymakers have a narrow window to identify and disrupt new procurement routes. Tehran has signalled an unwillingness to compromise on key demands and will try to play for time, knowing that President Trump is unlikely to resume the military campaign in the run-up to November's midterm elections, according to CSIS analysts. The last time Iran and the United States secured a comprehensive nuclear accord was in 2015 after two years of negotiations — and Trump withdrew from that deal during his first term. The MOU commits Iran to repeat past pledges never to acquire nuclear weapons and to engage in technical negotiations on its stockpile of highly enriched uranium and future enrichment capacity, but the gap between those pledges and a verifiable, enforceable agreement is vast.

Lebanon has emerged as the most immediate spoiler risk. The Council on Foreign Relations observed that while the MOU text calls for the ceasefire to extend to Lebanon, there is no indication it requires Israel to withdraw its forces from the south — and Israeli Prime Minister Benjamin Netanyahu has said explicitly that a security buffer will remain. Iran and Hezbollah reject this interpretation. The analysis published by Hasht-e Subh noted that Israel has continued airstrikes and maintained forces in southern Lebanon, effectively undermining what was signed, while Iran, pointing to the fact that it was not defeated on the battlefield, is unlikely to retreat from positions on preserving its nuclear infrastructure. The CFR's David Hart wrote on July 3 that Lebanon is the variable most likely to play spoiler to any long-term deal, as the Lebanese government simultaneously faces Hezbollah's continued provocations and the massive task of pursuing its disarmament campaign alongside a recovery plan for displaced citizens.

Israel's relationship to the MOU is the deal's most structurally anomalous feature. Although Israel participated alongside the United States in the February 28 strikes that started the war, it is not a direct party to the Pakistan-mediated negotiations, according to the UK Parliament's Commons Library. CSIS analysts noted that war costs for the US are estimated at between $34 billion and $42 billion, and that since neither the FY 2026 defence budget nor the FY 2027 budget request includes war costs, Congress faces a significant fiscal battle ahead. Iran's Iran warned vessels to use only designated shipping lanes through the Strait of Hormuz or face a forceful response, as recently as late June, according to Time magazine's reporting. OilPrice.com reported that Iran has warned of $140 oil if Trump moves to maintain a Hormuz blockade posture, and that California petrol prices have already surpassed $6 a gallon on Strait of Hormuz fears.

With the funeral of Ayatollah Khamenei pausing formal talks and introducing new uncertainty about Iran's internal power structures, the diplomatic calendar is compressing around a set of deadlines that none of the principal parties fully controls. The 60-day MOU clock was triggered on June 17, meaning a final deal — or its collapse — must be confronted before mid-August, just as the US midterm election campaign enters its most sensitive phase. The Atlantic Council warned that an MOU without a follow-on deal will be volatile and impossible to sustain on its own, and that there must be a further understanding regarding the Strait of Hormuz to ensure the resumption of maritime commerce. For now, the world's most strategically vital waterway remains open — but only just, and only on terms that no party has yet agreed to make permanent.