The United States and Iran are engaged in last-stage negotiations over a war-ending agreement behind the scenes, even as they openly clash militarily. Both sides have narrowed their differences from earlier positions, but disagreements remain on certain provisions, according to reports.
On Sunday local time, major foreign media outlets including The New York Times and Axios reported the main contents of a draft war-ending agreement under negotiation between the US and Iran, citing US and Iranian officials.
President Donald Trump has not yet signed the agreement, according to the reports. However, the US side believes Iran is prepared to sign with approval from its top leadership, Axios reported. With brief skirmishes between US and Iranian forces in recent days, pressure on the negotiating teams to reach a deal has intensified.
Possible $300 Billion 'Iran Reconstruction Fund'
The most striking provision in the draft reported by the NYT is the establishment of an investment fund for Iran's reconstruction. A diplomatic source involved in the negotiations said, "If a final agreement is reached, the US will support the creation of the fund."
Iranian officials said the fund would be worth $300 billion (roughly 450 trillion won). Iran had previously demanded $300 billion to $1 trillion in reparations for war damages. If the investment fund is finalized, Iran — which had been demanding reparations — is likely to gain justification for ending the war.
The concept originated from ideas put forward by Trump's Middle East envoy Steve Witkoff and his son-in-law Jared Kushner. Both former real estate developers, they have reportedly proposed Tehran real estate development and an investment fund. In response, Iran proposed that major US companies, including oil and energy firms, could enter Iran to pursue investments and joint ventures.
Time-Limited End or 60-Day Truce... Hormuz Also a Hurdle
The agreement is expected to specify the terms of a non-aggression pact between the US and Iran. However, the two sides differ on the duration and scope of the cessation of attacks. Mediating countries said the agreement would include "regional elements," and Iran in particular expects a halt to fighting on the Lebanese front to be included. Since the war began, Israel has clashed with Lebanon, where the pro-Iran armed faction Hezbollah operates, and fighting has continued despite an agreed ceasefire. Israeli Prime Minister Benjamin Netanyahu recently signaled an expansion of attacks on Lebanon.
A diplomatic source familiar with the negotiations told the NYT that the draft agreement calls for a 60-day initial halt to hostilities to allow negotiations, with the possibility of an extension. Iran, however, claims the draft includes a "declaration of war's end" on all fronts, including Lebanon, during the negotiation period. While the US envisions merely halting military clashes, Iran is demanding pressure relief equivalent to ending the war.
The NYT also noted that since negotiations are being conducted indirectly through Pakistan and Qatar, it remains unclear whether the two sides are even negotiating over the same agreement.
Reopening the Strait of Hormuz also remains a key sticking point. The US interprets the deal as immediately reopening the strait while maintaining a US naval blockade, with the blockade gradually eased depending on whether Iran allows shipping volumes to return to prewar levels. The aim is to incentivize Iran to swiftly remove mines. The US also plans to waive some sanctions related to Iran's oil sales, Axios reported.
Iran, by contrast, said the US naval blockade would be lifted within 30 days. The US side rebutted to the NYT, "No separate deadline has been set." Iran's negotiators are seeking a long-term restructuring that would allow Iran and Oman to impose tolls on traffic through the Strait of Hormuz, while some US negotiators have proposed addressing such issues in a second round of talks.
If all of Iran's overseas funds are released, Trump could face attacks from the opposition and Iran hawks. Trump has told aides he will not sign any agreement that could be perceived as the US directly handing cash to Iran, raising the possibility of a third country such as Qatar releasing the funds to Iran. Iran is demanding access to up to $20 billion in assets frozen across the Middle East region.
Nuclear Issue Also Pushed to Second Round... 'Obama Trauma' Over Frozen Asset Release
The handling of enriched uranium — long considered a root cause of US-Iran tensions — has been deferred to a second round of negotiations. The disposition of Iran's 440 kg uranium stockpile and 10 tons of low-enriched nuclear material is expected to return to the table later.
Trump initially insisted the stockpile be transferred to the US, but signaled flexibility this week on social media, saying dilution or transfer to a third country under international inspectors' supervision would be acceptable. On the 27th, however, he said, "Russia or China taking it is unacceptable."
According to Iran, in exchange for Iran halting its nuclear program, the US has agreed not to impose additional sanctions during the final negotiation period. If a final agreement is reached, existing US sanctions will be lifted in stages.
The phased release of frozen overseas assets, which Iran is urgently demanding, is also expected to be included in the agreement. Iran has roughly $24 billion (36 trillion won) frozen in overseas banks and considers releasing those funds a precondition for negotiations.
But releasing Iran's frozen assets is a "sensitive issue" for Trump, the NYT analyzed. Trump has consistently criticized former President Barack Obama for sending $1.7 billion to Iran in exchange for the release of four detained Americans following the 2015 nuclear deal.
