US-Iran deal said set to halt regional hostilities, including in Lebanon, lift blockade

The US-Iran memorandum of understanding expected to be signed in person on Friday includes a full cessation of hostilities by Iran, the United States and their allies — including in Lebanon where Israel has been battling Tehran’s proxy Hezbollah, several outlets reported Tuesday, among them Channel 12 news, which cited a senior US official, and Al Arabiya, which published what it said was a copy of the 14-point agreement’s full text.

The framework reportedly sees Iran reaffirm its commitment not to develop or acquire nuclear weapons, while Washington and Tehran work to resolve the issue of Iran’s existing stockpile of enriched uranium and to hold talks on future enrichment and the Islamic Republic’s civilian nuclear needs.

Under the reported terms, the US will lift its naval blockade, refrain from imposing new sanctions or reinforcing military forces in the region during the negotiations, and grant Iran sanctions relief for oil sales. Iran, meanwhile, will maintain the status quo regarding its nuclear program and take steps to ensure commercial navigation at pre-war volumes through the Strait of Hormuz for 60 days of nuclear talks.

The reports said the memorandum will also make Iran’s frozen assets available upon implementation and, if a final lasting agreement is reached, will lead to a US withdrawal of forces deployed to the region and the lifting of all sanctions on Iran. A final deal would also reportedly include a $300 billion fund for investment and reconstruction in Iran.

According to Channel 12, senior US officials were divided over the proposal, with Vice President JD Vance and envoys Jared Kushner and Steve Witkoff supporting it, while Secretary of State Marco Rubio, Defense Secretary Pete Hegseth and CIA Director John Ratcliffe expressed doubts that Iran would uphold its commitments.

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Meanwhile, Israel has yet to be briefed on the agreement’s official terms, the network said, adding that Jerusalem requested to review the memorandum, but Washington declined, reportedly out of concern that the details would be leaked.

Channel 12 further reported, citing senior Israeli officials, that Israel fears Iran will use the 60-day nuclear negotiation period to advance its nuclear program and make progress towards developing a nuclear weapon.

The network said Israel assesses that Iran’s Supreme Leader Mojtaba Khamenei has no intention of reaching a final nuclear agreement and approved the MOU primarily to open up the Strait of Hormuz and secure economic relief for the regime.

Israeli defense officials reportedly warned the government that Tehran “will drag out the process, and the 60 days of negotiation will turn into much more.”

One senior Israeli official told Channel 12 it would be surprising if Iran did not use “all its efforts and tricks to shorten the timeline to nuclear breakout under the cover of negotiations.”

Meanwhile, a source with direct knowledge of the deal told Reuters that the $300 billion private fund designed to trigger investment into Iran is indeed outlined in the US-Iran framework agreement, adding that more than half that sum has already been committed.

The fund is designed to give both sides an economic incentive to conclude a final deal, said the source, who spoke on condition of anonymity because the plan has not yet been announced as Washington and Tehran prepare to formally sign it on Friday, having already digitally signed it on Sunday.

The new fund is a private investment vehicle, not a reconstruction or reparations program, and will not include any government money or grants, the source said, adding that companies based in the US, the Gulf Arab states, Asia, South America and Africa have agreed to commit financing.

Investments pledged span energy, logistics, manufacturing and transportation, the source said.

A senior Iranian source told Reuters that Tehran had originally sought $400 billion as compensation for war damages from the US, but Washington had said it would not provide it.

The idea for the fund, which is to be named the Reconstruction and Development Fund, had then emerged.

The mechanism envisages regional countries contributing in various ways, the Iranian source said. These include securing loans, establishing credit lines or directly financing the reconstruction of sites damaged in the war, including facilities such as the Mobarakeh Steel complex, refineries, airports and, more broadly, infrastructure affected by the conflict.

Iran, one of the Middle East’s largest economies, has attracted almost no significant foreign direct investment in the past four decades, frozen out of global capital markets by successive waves of US and international sanctions.

The country has the world’s second-largest proven natural gas reserves and the fourth-largest proven oil reserves.

It also has a young, educated population of more than 92 million people, a diversified industrial base and significant untapped potential in sectors ranging from petrochemicals and mining to tourism and agriculture.

The investment fund is entirely separate from a parallel negotiating track over the lifting of US sanctions and the release of Iranian sovereign assets frozen abroad, the source said, describing the two as distinct financial mechanisms with different purposes and timelines.

The fund will not be created or become operational until a final and satisfactory deal is concluded.

“It’ll only be created once the final deal is signed,” the source said. “During these 60 days, the fund administrators will work with Iranians and investors to plan and scope projects.”

The Iranian foreign ministry and Pakistan’s foreign ministry, which helped mediate the investment fund deal, did not immediately respond to requests for comment, though Iran’s top Joint Military Command warned Israel should expect a hard response from the Iranian armed forces if it did not stop striking Hezbollah in southern Lebanon.

A White House spokeswoman pointed to a CBS interview with Vance on Monday in which he said that Iran could gain access to a $300 billion reconstruction fund backed by Gulf states if it complies with an ⁠agreement with ​Washington, including dismantling its nuclear program, eliminating its stockpile of enriched material, and accepting a ​stringent inspection and enforcement regime.

The source would not say how the fund will be administered or by whom, noting that key details were still to be worked out.

The source named companies from South Korea, Japan, Singapore, Malaysia and the United States among those that had made commitments, but declined to provide a comprehensive list.

The 60-day memorandum is a framework, not a final agreement, and US and Iranian negotiators are expected to work across multiple tracks during that period, covering nuclear, sanctions and regional security issues.