US and Iran mediators are now engaged in high-stakes negotiations aimed at ending the conflict, despite a fragile ceasefire in place and months of turmoil in the Middle East triggered by Donald Trump’s ambitious military campaign launched on February 28.The possible truce plan includes key bargaining points between the two sides, including a proposed $300 billion investment package and the crucial Strait of Hormuz issue, making the agreement extremely closely watched for.According to a report by The New York Times, officials involved in the talks are discussing a new draft memorandum that is said to be closer to gaining approval from both sides, although disagreements over several key terms remain unresolved.The proposed agreement would serve as an initial framework for broader and more difficult negotiations on Iran’s nuclear programme, US sanctions, regional security and a formal end to hostilities. However, one of the biggest developments emerging from the discussions is a proposed multi-billion dollar reconstruction and investment package that could fundamentally reshape Iran’s economy if a final deal is reached.While negotiators say progress has been made in recent days, President Donald Trump has not yet approved the draft.Click here to follow live updates on Iran war
Fresh talks amid fears of renewed fighting
For weeks, mediators from regional powers, including Pakistan and Qatar, have been attempting to broker an understanding between Washington and Tehran. Previous efforts repeatedly collapsed as both sides accused each other of delaying negotiations or misrepresenting the terms being discussed.
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Diplomats familiar with the latest talks said there is growing urgency to secure an agreement as sporadic exchanges of fire between US and Iranian forces continue despite the ceasefire. Officials fear that further military escalation could derail diplomatic efforts entirely and further damage already fragile regional energy markets, New York Times reported. According to diplomats involved in the negotiations, the latest proposal outlines a temporary non-aggression arrangement between the two sides, potentially lasting for an initial 60-day period while further talks continue. Officials believe the temporary pause is aimed at creating enough political space for negotiations on economic relief, sanctions and reconstruction funding.
Multi-billion dollar investment proposal under discussion
One of the most striking aspects of the latest draft agreement is the inclusion of a possible international investment and reconstruction fund for Iran worth as much as $300 billion.According to officials involved in the talks, the proposal is being discussed as part of a broader effort to rebuild Iran’s damaged economy following months of conflict, sanctions and bombardment.Iranian officials view the proposal as a reconstruction mechanism and partial compensation for war-related destruction. Some Iranian estimates have placed the overall economic damage caused by the conflict between $300 billion and $1 trillion.Also Read | From Hormuz to nuclear talks – what to expect in the 60-day US-Iran ceasefire proposalDiplomats briefed on the negotiations described the proposal as an international investment framework that the United States would help facilitate if a permanent agreement is eventually reached.The plan is believed to be linked to earlier proposals floated by Trump’s Middle East envoy Steve Witkoff and Trump’s son-in-law Jared Kushner, both of whom have reportedly discussed future real estate, infrastructure and energy investments in Iran if relations improve.Iran has also proposed allowing major US oil and energy companies to enter the country through investment partnerships and joint ventures should sanctions eventually be lifted.Officials said discussions are still at a preliminary stage and many details including the structure of the investment mechanism, participating countries and timelines remain unresolved.
Frozen Iranian assets could become part of negotiations
Another major pillar of the discussions involves billions of dollars in frozen Iranian assets held abroad, which Tehran considers essential for any meaningful economic recovery.Iran is believed to have nearly $24 billion frozen in overseas banks and has insisted that negotiations cannot progress without at least partial access to those funds.Iranian officials are pushing for access to as much as $20 billion in frozen assets during the negotiations period, arguing that the money is needed for reconstruction, stabilising the economy and restoring critical infrastructure.
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The issue remains politically sensitive for Trump, who has repeatedly criticised former President Barack Obama over the 2015 transfer of $1.7 billion to Iran as part of a prisoner exchange agreement.To avoid accusations of direct US payments to Tehran, officials familiar with the talks said Washington is exploring mechanisms involving third-party countries, including Qatar, to gradually release Iranian funds.Diplomats said the phased release of frozen assets could become one of the key confidence-building measures in the negotiations, particularly as both sides attempt to balance economic relief with ongoing political and security concerns.
Ceasefire terms and regional tensions remain unclear
The new draft also includes the discuss the scope and duration of the ceasefire arrangement. Diplomats briefed on the discussions said the draft proposes an initial halt to hostilities for 60 days, with the possibility of an extension if negotiations progress.However, Iranian officials describe the proposal differently. According to one Iranian official quoted in the report, the draft includes a broader ‘declaration of the end of war’ across all fronts, including Lebanon, for the duration of negotiations.The proposed regional component is also expected to include a halt in fighting involving the Iran-backed militant group Hezbollah in Lebanon, where ceasefire violations have continued despite previous agreements.Negotiators also remain uncertain about who within Iran’s political and military leadership has the final authority to approve any agreement, further complicating the talks.Diplomats warned that unless the ceasefire holds for a sustained period, discussions around sanctions relief, reconstruction investment and frozen Iranian assets may struggle to move forward.
Strait of Hormuz remains a key obstacle
The future of the Strait of Hormuz continues to be one of the most contentious issues in the negotiations, particularly because of its importance to global oil and energy markets.The strategic waterway, through which nearly one-fifth of the world’s oil and gas supplies pass, was effectively disrupted after Iranian attacks and subsequent US naval actions earlier this year triggered a major global energy shock.Under the US understanding of the draft memorandum, the strait would reopen immediately for commercial shipping, although the American naval blockade on Iranian ports would only be lifted gradually depending on the restoration of maritime traffic.
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Iranian officials, however, reportedly want the blockade removed within 30 days and continue to argue that Iran and Oman should retain the right to impose service fees or tolls on vessels passing through the waterway in the future.President Trump has publicly rejected the idea of any toll system in the strait, insisting the route must remain open to international shipping without restrictions.Diplomats said resolving the Hormuz issue is central to the wider negotiations because any long-term investment plan for Iran would depend heavily on stable oil exports and uninterrupted shipping access.
Nuclear negotiations pushed to later phase
The latest framework postpones the most sensitive issue of all, Iran’s nuclear programme to a second phase of negotiations.According to diplomats familiar with the draft, the agreement would commit both sides to future talks over Iran’s enriched uranium stockpile, including material that could potentially be converted to weapons-grade fuel.The discussions are expected to focus on how Iran’s uranium reserves would be handled, whether through dilution under international monitoring or transfer to a third country.Trump had earlier suggested the stockpile should be moved to the United States, although he has recently signalled openness to other options. However, he reportedly remains opposed to Russia or China taking custody of the material.Iran, meanwhile, is seeking guarantees that Washington will not increase sanctions while negotiations continue. Iranian officials also expect existing sanctions to be gradually lifted if a permanent agreement is eventually reached.Diplomats said progress on nuclear negotiations would likely determine whether large-scale international investments and sanctions relief could ultimately materialise.
