The United States and Iran have signed a memorandum of understanding to end a near four-month war, senior US officials said on Monday, adding that a formal signing ceremony would take place on Friday and shipping traffic in the Strait of Hormuz would significantly but gradually ramp up.
The memorandum of understanding has been signed by President Donald Trump and Vice President JD Vance and Iranian parliament speaker Mohammad Bagher Qalibaf, one US official said.
After weeks of negotiations, the news that Washington and Tehran had agreed to end the war brought relief to markets, although risks remain given the pact defers potentially complicated talks on containing Tehran's nuclear programme.
While still a framework, the deal marked the biggest breakthrough toward resolving the conflict that has killed thousands and upended energy markets since it began with joint US-Israeli strikes on Iran in February.
The MOU will provide a structure for how the US-Iran relationship will operate in the future, said the official, speaking on the condition of anonymity in a briefing with reporters, emphasising that any benefits to Iran such as sanctions relief and release of Tehran's frozen funds would only come based on their willingness to work with Washington on their nuclear programme and not fund what the US official described as "radicalism" in the region.
"We are prepared to release frozen funds and we are prepared to relieve sanctions, and we'll do some small gestures of that in the beginning if they make some small gestures to us that show that they're willing to meet their commitments as well," the second US official said.
He added that the MOU would be made public within 24 to 48 hours.
In the short term, the MOU will allow the immediate reopening of the Strait of Hormuz, a major shipping route for global oil and gas supplies that Iran has effectively shut for months, but one US official cautioned that it would take a while for traffic to return to normal.
"You will see significant increase in traffic in the Strait of Hormuz, actually starting already, and that will ramp up slowly over time," the official said.
"We probably won't return to normal in two weeks, but we will see a significant increase in strait traffic," the official said.
Israel's withdrawal from Lebanon is not a condition of a pact between the United States and Iran, said a senior US official on Monday, adding Israel will have the right to defend itself against any attacks by Hezbollah.
(Reporting by Humeyra Pamuk and Ryan Jones, editing by Michelle Nichols and Sanjeev Miglani)
