About $120 billion of frozen Iranian assets is the bargaining chip behind a draft deal that would pause fighting and reopen the Strait of Hormuz, but leave major nuclear questions unresolved, according to reporting by Reuters and Al Jazeera. Negotiators want to tie those funds to limited sanctions relief in a memorandum discussed on May 28-29. The paper would lock in a ceasefire, secure commercial shipping through the Strait and push detailed nuclear negotiations to a later stage, while leaving the legal status of the Strait, the fate of Iran's near-weapons-grade uranium and the scope of sanctions relief unsettled. The White House says any pact must stop Tehran acquiring a nuclear weapon. On May 29 the president entered the White House Situation Room to decide whether to approve the proposed framework; aides say he is "in no rush" and will accept only a "great" deal.

A temporary deal that restores shipping through the Strait of Hormuz could have immediate economic effects, most notably easing a recent spike in U.S. gasoline prices by returning crude flows through the chokepoint. But the arrangement on the table looks designed to buy time rather than to settle the biggest disputes, according to negotiators and analysts following the talks.

The draft memorandum, as reported, would lock in a ceasefire and secure immediate relief for vessels transiting the Strait, while deferring the thorny nuclear questions to a second stage. That sequencing has a practical appeal: it reduces the near-term risk of wider military escalation after the U.S. and Israel struck Iran on February 28, and it produces a visible deliverable for global markets and regional governments.

But the paper leaves major gaps. Leaks and summaries show no final text has been published, and senior U.S. officials haven't revealed a complete set of terms. Among the unresolved issues are the legal status of the Strait in the longer term, the fate of Iran's near-weapons-grade enriched uranium, and the scope and timing of any sanctions relief. A White House official, speaking on condition of anonymity, said administration negotiators had defined red lines and were seeking terms that would block Tehran's path to a bomb. Yet those red lines aren't spelled out in the draft summaries available publicly.

Frozen Iranian assets have become a focal point of the bargaining. Al Jazeera reported the assets earmarked in the talks are estimated at about $120 billion. That sum links sanctions relief directly to economic incentives and to the controls the United States would seek to impose on any released funds. How those funds would be used, who would oversee them, and what limits would be placed on Tehran are among the unresolved technical questions diplomats and analysts say will determine whether an interim framework can be turned into a durable settlement.

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Politics at home and diplomacy across the region

Politically, the framework exposes President Trump to pressure from his own side. Prominent Republican hawks have publicly warned against a deal they judge not enough to eliminate Iran's nuclear threat.

Senators Lindsey Graham, Roger Wicker and Ted Cruz urged the president not to compromise, arguing that a short-term pause without firm nuclear constraints would leave Tehran's capabilities intact.

That domestic resistance complicates what's already a delicate regional diplomatic problem. Mr Trump has pushed to fold an expansion of the Abraham Accords into any comprehensive settlement, pressing for wider normalisation between Israel and additional Arab and Muslim states as part of a broader bargain. He told advisers he wanted Saudi Arabia and other regional powers to sign on. But several of the governments named face domestic and regional pressures after the war, and Israel is unlikely to accept an arrangement it judges weak on its security needs. Senior U.S. officials are expected to engage with Gulf leaders in the weeks ahead to discuss these broader arrangements.

Analysts are sceptical Tehran will accept U.S. demands without reciprocal concessions. Al Jazeera quoted analyst Alex Scheers as saying "nothing concrete is in place" yet, reflecting wider doubt that Iran would readily accept proposals that would downblend or remove uranium stockpiles and render enrichment facilities inoperable. Some diplomats and analysts recall a 15-point U.S. proposal first circulated in May 2025 that Tehran rejected. Diplomatic sources describe that earlier document as including strict limits on Iran's use of any funds released by sanctions relief and specific steps to reduce enrichment capacity. Implementing those measures would be difficult for Tehran without significant offsets.

The lack of a full published draft is feeding uncertainty on both sides. Negotiators and outside analysts characterise the deal under discussion as effectively an interim arrangement, not a full settlement. That posture buys negotiators time to iron out verification measures, sequencing of sanctions relief, and the disposition of frozen assets. But it also leaves the most contested subjects unresolved, which in turn risks renewed confrontation if the follow-up talks falter.

For the White House, the political calculation is stark. The administration has signalled it will only accept an agreement that prevents Iran from acquiring a nuclear weapon. Yet accepting a framework that prioritises immediate de-escalation over final nuclear limits invites criticism from hawks who want a definitive outcome. Mr Trump told aides he was "in no rush" and would accept only a "great" deal, language that signals he sees room to walk away if the terms don't meet his standard.

Behind the scenes, senior U.S. officials will have to reconcile three linked objectives: securing shorter-term stability at the Strait of Hormuz, imposing credible restrictions on Iran's nuclear path, and building regional buy-in for any long-term settlement. Each element makes the others, and negotiators face the hard task of converting a loose framework into enforceable commitments.

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Senior U.S. officials are expected to consult Gulf leaders in the weeks ahead about expanding the Abraham Accords as part of any Iran settlement, a regional bargaining round that will be decisive in whether this interim framework can be turned into a broader, enforceable deal.

This article was created with AI assistance.