US President Donald Trump and Iranian President Masoud Pezeshkian have signed an initial agreement to extend the ceasefire for another 60 days and lay the groundwork for reopening the Strait of Hormuz and launching negotiations on Iran’s nuclear programme.
Trump signed a landmark memorandum of understanding with Iran at the Palace of Versailles on Wednesday, marking what both sides described as the first major step toward ending the war between the United States and the Islamic Republic of Iran.
The signing ceremony took place shortly before a state dinner hosted by French President Emmanuel Macron in the palace’s historic halls. Video footage released by the White House showed Trump signing the Persian-language documents before handing the pen to Secretary of State Marco Rubio and instructing him to pass it to the Iranian delegation for the corresponding signature. All present applauded Trump for signing the deal.Iranian President Masoud Pezeshkian signed the Iran-US Memorandum of Understanding in a short time gap.
Iran’s foreign ministry spokesperson said the agreement had been digitally signed by President Masoud Pezeshkian.
Pakistan’s Prime Minister Shehbaz Sharif, a key intermediary between the US and Iran, said the agreement had entered into force with “immediate effect” after both sides signed it
The agreement, officially known as the Islamabad Understanding, was signed by both presidents after months of indirect negotiations and international mediation efforts. The memorandum takes effect immediately and establishes a framework for a broader peace settlement that both nations will seek to finalize within the next 60 days.
The ceremony at Versailles represented a highly diplomatic moment following months of escalating tensions and conflict that began on February 28 with the assassination of the Iranian supreme leader, Ayatollah Ali Khamenei and several senior Iranian military commanders, which reshaped the political and economic landscape of the Middle East. The war rapidly expanded into a broader regional crisis, disrupting energy markets and international trade.
The cost was borne by the world as it disrupted the energy supply lines, fertilizers, and much more.
France president Emmanuel Macron described the signing as one of the most “significant diplomatic achievements” of the year, bringing together representatives of two nations that have remained adversaries for decades.
Under the terms of the preliminary agreement, Iran will reopen the strategically vital Strait of Hormuz, a crucial global shipping route through which approximately one-fifth of the world’s oil and liquefied natural gas exports normally pass. The memorandum also outlines a proposed $300 billion (£224 billion) reconstruction and development initiative intended to support Iran’s post-war recovery and economic stabilization.
In addition, the United States has agreed in principle to terminate all sanctions imposed on Iran as part of a final settlement, though details regarding implementation remain subject to further negotiations.
One of the most contentious issues—Iran’s nuclear programme—has not yet been fully resolved. The memorandum establishes a 60-day negotiation period, which may be extended by mutual consent, during which both sides will attempt to reach a comprehensive agreement on nuclear safeguards and verification measures.
As part of the initial understanding, Iran reaffirmed that it would not pursue or develop nuclear weapons. The agreement also provides for Iran’s enriched uranium stockpiles to be diluted under the supervision of the International Atomic Energy Agency (IAEA), the United Nations’ nuclear watchdog. This represents a compromise from Washington’s earlier demand that all enriched nuclear material be removed from Iranian territory.
Speaking to reporters during the G7 summit in France, President Trump defended the agreement as a necessary step to prevent a potentially severe global economic crisis.
“I didn’t want to see economic catastrophe,” Trump said. “If this conflict continued, the consequences for the world economy could have been enormous.”
The President noted that global financial markets consistently reacted positively whenever prospects for peace improved, arguing that a diplomatic solution was essential to restoring economic confidence.
One of the most significant economic consequences was Iran’s effective closure of the Strait of Hormuz, which sent oil prices sharply higher and reignited concerns about global inflation. Following news of the peace agreement, oil prices fell modestly in international markets, although they remain considerably above pre-war levels.
The memorandum guarantees unrestricted passage through the Strait of Hormuz for the next 60 days, with no transit charges imposed on commercial vessels. However, Iranian officials have indicated that the waterway may not return entirely to its pre-war operating framework once the initial period expires.
Iranian parliamentary speaker and chief negotiator Mohammad Bagher Ghalibaf welcomed the agreement while expressing caution about American intentions.
“Our distrust of the United States remains,” Ghalibaf told Iranian state media. “If the enemy does not understand the language of logic, we will again speak the language of power.”
He added that Iran remained prepared to defend its interests if negotiations ultimately fail.
The agreement also calls for the immediate and permanent cessation of military operations across all fronts, including Lebanon. However, questions remain regarding implementation, particularly after Israel indicated it does not currently intend to withdraw forces from Lebanese territory and continued operations against Hezbollah following the announcement.
President Trump acknowledged concerns regarding regional stability and suggested that he had urged Israeli Prime Minister Benjamin Netanyahu to exercise greater restraint in military operations moving forward.
