The United States, Iran, and a group of regional mediators are weighing terms for a temporary ceasefire that could extend into a permanent resolution, according to U.S., Israeli, and regional sources familiar with the discussions.
Summary
- U.S., Iran, and regional mediators are discussing a two-phase ceasefire plan, though chances of a near-term deal remain limited.
- Pakistan has proposed an “Islamabad Accord” to reopen the Strait of Hormuz and prevent further escalation.
An Axios report said prospects for a partial deal within the next 48 hours remain limited. Still, officials described the effort as the final opportunity to avoid a sharp escalation that could involve strikes on Iranian civilian infrastructure and retaliatory attacks on energy and water facilities across Gulf states.
Separately, a source familiar with the negotiations said both Washington and Tehran have received a proposal that could halt hostilities as early as Monday while reopening the Strait of Hormuz. The plan, drafted by Pakistan and shared overnight, outlines a two-step process beginning with an immediate ceasefire followed by negotiations toward a comprehensive settlement.
“All elements need to be agreed today,” the source said, noting that the initial understanding would take the form of a memorandum of understanding finalised electronically through Pakistan, which has emerged as the sole communication channel.
Pakistan’s army chief, Asim Munir, has been in continuous contact “all night long” with JD Vance, envoy Steve Witkoff, and Iranian Foreign Minister Abbas Araqchi, the source added.
Under the framework, a ceasefire would take effect immediately and allow shipping to resume through the strait, with a 15 to 20-day window to finalise a broader agreement. The proposal, informally referred to as the “Islamabad Accord,” also envisions a regional framework governing the waterway, with final in-person talks expected in Islamabad.
The continued blockade of the Strait of Hormuz has pushed global oil prices higher.
Donald Trump has repeatedly issued deadlines for Iran to reopen the passage or face military action targeting its energy infrastructure. In a recent Truth Social post, he extended the deadline to Tuesday and warned Iran would be “living in hell” if it failed to comply.
Despite mounting diplomatic pressure, Tehran has yet to signal acceptance of the proposed ceasefire. Iranian officials have said any agreement must include guarantees against future attacks by the U.S. and Israel. They also confirmed receiving messages from mediators, including Pakistan, Turkey, and Egypt, supporting a temporary 45-day truce to allow further negotiations.
The draft agreement is expected to include commitments from Iran not to pursue nuclear weapons in exchange for sanctions relief and access to frozen assets. However, officials said no formal commitment has been secured so far.
Iran’s leadership has maintained a defiant stance, warning it would respond “in kind” to any attack on its infrastructure, while also considering measures such as transit tolls before reopening the strait.
How will the crypto market react to potential de-escalation?
Although no agreement has been finalised at press time, risk assets have started to recover. The total crypto market cap has risen around 3.4% to $2.47 trillion, with Bitcoin (BTC) attempting to reclaim the $70,000 level. Ethereum (ETH), XRP (XRP), and other major crypto tokens have posted gains in the 3% to 6% range.
The move suggests traders may already be positioning for a potential de-escalation and the reopening of the Strait of Hormuz, which could stabilise energy markets and ease inflation pressures.
Traditional markets, however, presented a mixed picture. Asian equities were mostly lower, with the Nikkei 225 standing out as an exception, while gold and silver traded in a narrow range as investors balanced uncertainty with selective risk exposure.
A confirmed ceasefire could support both crypto and global equities by easing oil prices and improving expectations for monetary policy. Lower energy costs tend to reduce inflation pressures, which could increase the likelihood of a more accommodative stance from the Federal Reserve.
Failure to reach an agreement carries the opposite risk. An escalation involving direct strikes on Iranian infrastructure and retaliation across the region could trigger a sharp shift toward safe-haven assets, putting pressure on cryptocurrencies as capital moves into the dollar and traditional defensive plays.
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