The U.S. and Iran Signed a Ceasefire to End the 110-Day War. Here is Why It Is Already Unraveling.

The 110-day war that paralyzed global energy markets and reshaped Middle Eastern alliances has officially paused, but the peace is already fraying at the edges. On Wednesday, U.S. President Donald Trump and Iranian President Masoud Pezeshkian signed the "Islamabad Memorandum of Understanding," an interim agreement designed to halt hostilities and reopen the heavily blockaded Strait of Hormuz.[1][2]

The breakthrough, finalized at the Palace of Versailles following mediation by Pakistan and Qatar, represents a dramatic pivot from military confrontation to high-stakes diplomacy. The conflict, which began in late February 2026 with coordinated U.S. and Israeli strikes on Iranian nuclear and military facilities, had rapidly escalated into a devastating regional war with profound economic consequences.[1][7]

The immediate global relief was palpable. For months, Iran’s retaliatory blockade of the Strait of Hormuz choked off roughly a fifth of the world’s oil and gas shipping, sending energy prices skyrocketing and threatening a global economic meltdown. Within hours of the signing, commercial vessels began transiting the waterway at the highest volume seen since April.[2][7]

However, the memorandum is not a comprehensive peace treaty. It is a sequencing mechanism that establishes a fragile 60-day window for direct bilateral negotiations. During this period, Washington and Tehran are expected to hammer out a final agreement addressing Iran’s nuclear program, the permanent lifting of U.S. sanctions, and a proposed $300 billion regional reconstruction fund.[1][7]

The core mechanism of the deal relies on intertwined concessions. The U.S. has agreed to lift its own blockade and grant necessary waivers for financial transactions, while Iran has committed to restoring maritime traffic and halting military operations. Crucially, the text mandates the immediate and permanent termination of military operations on all fronts, explicitly including Lebanon.[1][7]

That single clause regarding Lebanon has become the agreement’s most explosive vulnerability. While the U.S. and Iran agreed to the terms, Israel was not a party to the memorandum and does not consider itself bound by its stipulations regarding its northern border.[1][3]

Israeli Prime Minister Benjamin Netanyahu and his hardline coalition partners have reacted with fury to the U.S.-Iran detente. Israeli officials view the agreement as a strategic disaster that prematurely ends the military campaign while leaving Iran’s nuclear infrastructure largely intact.[4][6]

Across the Israeli political spectrum, the reaction has been described as a meltdown. National Security Minister Itamar Ben-Gvir and Defense Minister Israel Katz have explicitly stated that Israel will not withdraw its forces from southern Lebanon. Opposition figures have similarly castigated the deal, accusing the U.S. administration of throwing a lifeline to the regime in Tehran just as it was weakening.[4][6]

The disconnect between the memorandum's text and the reality on the ground became violently apparent by the weekend. Despite the announced ceasefire, Israeli military operations continued in southern Lebanon, aimed at neutralizing Hezbollah positions and establishing a buffer zone. Hezbollah forces retaliated, resulting in deadly cross-border flare-ups that killed several people.[2][5]

The continued fighting in Lebanon immediately derailed the diplomatic schedule. The first round of technical talks between the U.S. and Iran, slated to begin Friday in Switzerland, was abruptly canceled by Tehran.[2][3]

Iranian officials informed mediators that they would not sit at the negotiating table until the U.S. guaranteed that Israel would cease its operations against Hezbollah, as outlined in the memorandum. In response to the collapse of the Friday meetings, the White House announced that U.S. Vice President JD Vance had postponed his planned trip to Geneva.[2][3]

The diplomatic crisis has placed the U.S. administration in a precarious position between its closest Middle Eastern ally and its desire to exit a costly war. President Trump publicly urged all parties to maintain their commitment to the peace process, reportedly telling Israeli leadership to calm down and accept the ceasefire on all fronts.[1][2]

In Tehran, the regime is framing the survival of the 110-day war as a historic victory. President Pezeshkian told provincial leaders that the country withstood an onslaught designed to collapse its government and economy. The fact that Iran forced the U.S. back to the negotiating table without conceding military defeat is being broadcast domestically as a triumph of endurance.[1]

Yet, internal Iranian politics remain complex. Supreme Leader Mojtaba Khamenei, who assumed the role following the death of his father in the war's opening hours, issued a statement offering cautious, conditional support for the memorandum. He authorized the negotiations but warned that engaging with the U.S. does not mean accepting the enemy's worldview, reflecting deep-seated institutional distrust.[1][2]

The next 60 days will test the durability of this fragile architecture. Mediators from Pakistan, Qatar, and Switzerland are working frantically behind the scenes to salvage the Geneva talks and find a formula that satisfies Iran’s demands for a Lebanese ceasefire without entirely alienating Israel.[3][7]

If the talks collapse, U.S. officials have indicated they are prepared to aggressively tighten economic and military pressure once again. For now, the world watches the Strait of Hormuz and the hills of southern Lebanon, knowing that a single miscalculation could instantly reignite a conflict that the global economy can ill afford.[1][7]