US, Iran signal peace deal near as Tehran claims victory

WASHINGTON/DUBAI/PARIS, June 12 - The United States and Iran signaled on Friday that an agreement to end their war was close, with a senior US administration official saying both sides had agreed on a text and that Washington expects to sign an initial deal in the coming days.

Iranian Foreign Minister Abbas Araqchi said changes were yet possible, but the tentative agreement made clear that his country had emerged stronger from the conflict.

"Iran is the winner of the war with the US," he said on state television.

The so-called memorandum of understanding calls for reopening the Strait of Hormuz and lifting the US blockade on Iranian ports, sources on all sides of the deal said. Negotiations over Iran's nuclear program -- US President Donald Trump's stated rationale for starting the war -- would take place afterward.

The US official, speaking on condition of anonymity, told reporters that the deal met Trump's core objectives and put negotiations "in a very, very good place."

Leaked terms of the proposed memorandum outlined by Western, Pakistani and Iranian sources earlier on Friday appeared to favor Iran, drawing criticism from Trump, who dismissed the reports as inaccurate.

While there were minor differences in the accounts, all appeared to offer Tehran much of what it has demanded so far, with Trump appearing to win little of what he has sought beyond the reopening of the strait, which Iran shut after the US and Israel launched attacks in February.

Araqchi said Iran would along with Oman retain control of traffic through the strait, which before the war handled one-fifth of the world's oil and gas supply.

"Our sword will always hang over the Strait of Hormuz," he said.

What's in the deal?

Draft terms of the deal described to Reuters by multiple sources indicate that the US would immediately begin releasing billions of dollars in frozen Iranian assets and waive sanctions on its oil exports, in return for Iran opening the strait.

Iran's nuclear program would be addressed during a 60-day period of talks. The US official said the agreement would ultimately lead to the dismantling of Iran’s nuclear program, with its stockpile of highly enriched uranium to be destroyed and removed — a key US demand.

The proposals include discussion of possible war reparations for Tehran and dropping longstanding US demands for limits on Iran's missile program, the sources said.

Another senior US official, describing the agreement, said Iran's stockpile of highly enriched uranium "will be destroyed and removed" and Iran's nuclear program would be dismantled. The terms also include an inspection regime to ensure it is enforceable in the long term.

"None of their money released until they perform. Strait of Hormuz will be open. No Iran funding of terrorist groups," said the official, who spoke on condition of anonymity. "This is what they have agreed to. This is a performance-based deal."

Israel not party to memorandum

A Western source said the deal could be signed as soon as Sunday by US Vice President JD Vance and Iran's parliament speaker, Mohammad Baqer Qalibaf, with Geneva seen as the likeliest venue.

Araqchi said the deal would be signed remotely before it is announced.

The US administration official said Europe had been discussed as a venue for signing but no decision had been made.

Israel, which launched the war alongside the United States, has not been part of the negotiations. Prime Minister Benjamin Netanyahu said his country would not be party to the agreement.

Netanyahu has clashed with Trump in recent weeks over US demands that Israel curb military action in Lebanon to let Washington reach a deal with Tehran.

Araqchi said the agreement would end the war in Lebanon, which would mean Israel's withdrawal from occupied areas.

Israel's defense minister, however, said it would not withdraw from Lebanon. A senior Israeli official said Israel expects to retain its freedom to act against threats in areas under its control.

Oil price falls

The progress towards an agreement has emerged at the end of a week that brought a sharp escalation in hostilities in the Gulf, including Israeli-Iranian exchanges of fire and US strikes on Iranian targets, followed by retaliation against US bases.

Global stocks rose and oil prices fell on the news. Brent crude prices were down more than 3% at their lowest in nearly two months.

The conflict has become a political headache for the White House, amid rising fuel prices and slipping approval ratings for Trump.

Some Republicans worry that the war's unpopularity could cost them control of Congress in November's midterm elections. But many of his fellow Republicans may have difficulty endorsing an agreement viewed as too favorable to Iran.

Tehran has always said its nuclear program is peaceful and accepted tight curbs on it in return for the lifting of sanctions under a 2015 agreement with the administration of then-US President Barack Obama.

Trump abandoned that deal during his first term in 2018 and Iran responded by ramping up its enrichment of uranium, producing more than 400 kg (around 900 pounds) of material at close to the purity needed to make a bomb. — Reuters