The agreement opens the Strait of Hormuz and lifts sanctions, but the central US justification for the war—Iran's nuclear programme—will take 60 days to negotiate, extending uncertainty.
The presidents of the United States and Iran signed an initial peace deal on Wednesday aimed at ending the war, immediately reopening the Strait of Hormuz and terminating sanctions. But the core issue—the nuclear programme that triggered US military action—remains unsettled, with negotiations set to stretch across an extendable 60-day window.
The agreement, signed in France during the G7 summit at the lakeside resort of Evian-les-Bains, represents the first direct diplomatic cessation of hostilities since the US and Israel launched their war on Iran on 28 February. The deal's immediate effect is the reopening of the Strait of Hormuz, the key waterway through which roughly 20% of the world's oil and liquefied natural gas normally passes—a channel Iran had effectively closed since the conflict began, driving energy prices sharply higher.
The framework includes three principal commitments: reopening the Strait of Hormuz, a $300bn (£224bn) reconstruction plan for Iran's infrastructure, and the full termination of American sanctions across all categories. US President Donald Trump, signing alongside Iranian President Masoud Pezeshkian, defended the proposal as staving off an "economic catastrophe" that he said risked triggering a worldwide depression.
"I didn't want to see economic catastrophe," Trump told reporters. "If you kept this going, that could have happened. All I know is every time we talked about the possibility of peace, the stock market shot up like a rocket ship."
The deal was signed at the Palace of Versailles on the sidelines of the G7, with Trump noting the historic nature of the agreement. Oil prices dipped following the announcement.
Yet the agreement explicitly defers the issue that the US cited as its primary justification for launching the war: Iran's nuclear programme. Negotiations over this question will proceed over an extendable 60-day window—leaving the central casus belli unresolved at the moment of signing.
The war began on 28 February, when the US and Israel assassinated Supreme Leader Ayatollah Ali Khamenei and senior military officials on the first day of operations. Since then, the conflict has driven significant global economic disruption, including renewed inflationary pressures and the Strait of Hormuz closure.
The deal's durability remains in question. While Trump signed in France, he issued a stark warning: the US would "bomb the hell" out of Iran if no final agreement emerged. Iranian parliamentary speaker Mohammad Bagher Ghalibaf—the country's key negotiator—echoed the sentiment, telling state broadcaster Fars that Iran retained its military readiness.
"If the enemy does not understand the language of logic, we will enter again with the language of power," Ghalibaf said, adding that Iran's "finger is on the trigger."
The mutual reservation of military options underscores that Wednesday's signing represents a ceasefire and negotiation framework, not a definitive peace. The 60-day nuclear window is extendable by agreement—mirroring a known fragility pattern in prior US-Iran diplomacy, including the JCPOA sequence, where deadlines repeatedly slipped before eventual withdrawal.
The $300bn reconstruction figure represents a substantial commitment, though the source excerpt contains no public methodology for how that sum was derived or what specific projects it would fund. Similarly, the scope of "all types of sanctions" termination—codified in the agreement—raises implementation questions that the 60-day window will need to address.
For now, the immediate ceasefire holds. Whether the nuclear negotiations produce a final settlement, or collapse under the weight of the distrust both sides have signalled they retain, will determine whether this initial agreement becomes a durable peace or another chapter in an unresolved confrontation.