Iran–United States: Is a Peace Agreement Possible?

On 14 June, Iran and the United States announced a memorandum of understanding due to be signed on 19 June in Geneva. This initiative marks the opening of a new phase of negotiations between the two countries, three months after the outbreak of the war. The text is expected to provide in particular for the reopening of the Strait of Hormuz and the lifting of the American blockade targeting Iranian ports. However, several major questions remain unresolved, particularly regarding Iran’s nuclear programme. On the Iranian side, the conflict has worsened the country’s economic difficulties, already weakened by the clashes of 2025. Nevertheless, it has not led to the expected collapse of the regime, on the contrary, the war appears to have revived national sentiment and consolidated the position of the Iranian authorities. On the American side, the opening of these negotiations marks a break in the way Washington views its relations with Tehran and the limits of the military operation conducted by Donald Trump in Iran. In this context, how has the relationship between Iranian society and the authorities evolved since the outbreak of the war? What are the stakes of the memorandum of understanding concluded between Iran and the United States? Finally, is a compromise on Iran’s nuclear programme conceivable? Insights from Thierry Coville, Research Fellow at IRIS and specialist on Iran.

What assessment can be made of Iran’s domestic situation since the outbreak of the war? Has the Iranian regime emerged strengthened or weakened from the war and the negotiations with Washington?

The domestic political situation remains uncertain. It is clear that, before this war, Iran was facing a serious political crisis as a result of the January 2026 demonstrations and, above all, the repression that followed, which caused thousands of deaths. This was the most serious crisis of legitimacy for Iran’s political system since the revolution. At that time, part of the Iranian population, particularly those directly affected by the repression, expressed such anger that some called for military intervention by the United States. At the beginning of the war, some images that circulated even showed residents celebrating the first American bombings.

However, the situation became more complex: faced with the scale of the bombing and destruction, a nationalist reflex emerged. Many Iranians understood that the objective of the United States and Israel was not to bring democracy to Iran, but rather to weaken the country. The scenarios, particularly Israeli ones, which anticipated popular mobilisation in favour of regime change, did not materialise. At the same time, the Iranian authorities occupied the public space by mobilising their supporters, with demonstrations organised almost daily and a strong presence of security forces in the streets.

Politically, the resistance of the Iranian army to the American-Israeli attack and this renewed nationalism, the extent of which remains difficult to measure, suggest that the Iranian political system has been strengthened by this war. This is one of the paradoxes of the conflict.

At the same time, the economic situation has deteriorated sharply. It was already difficult before the war, particularly following the previous conflict. Iran experienced stagnant economic activity in 2025 and inflation reached 50%. With the war, prices continued to rise. According to the latest available figures, dating from April 2026, inflation is expected to have reached at least 80% in May 2026 according to the Central Bank of Iran, while the IMF forecasts 70% for the whole of 2026. Economic activity has probably contracted, particularly as a result of the conflict. The Iranian authorities themselves refer to two million job losses during the war. Added to this is the destruction of infrastructure, estimated by Tehran at 300 billion dollars.

The political system therefore appears to have benefited from greater support as a result of this conflict. However, it should be noted that, at the same time, repression has intensified since the ceasefire, with executions targeting in particular protesters arrested during the January 2026 demonstrations and arrests of opponents. At the same time, the economic situation remains particularly worrying. This fuels the authorities’ fears of renewed social mobilisation, as economic difficulties had already been one of the drivers of the January demonstrations. It is probably in this context that the Iranian authorities entered into negotiations with the United States in order to secure the lifting of sanctions and the return of Iranian assets frozen abroad.

What does the peace memorandum of understanding between the United States and Iran provide for? What consequences could it have for Iran and the regional balance?

The objective of the memorandum of understanding is to define a framework for future negotiations between the two countries, which in itself already represents an important development given the existing level of mistrust.

At this stage, no official text has been published. According to the information available, the memorandum of understanding could cover concrete measures, such as Iran opening the Strait of Hormuz in exchange for the United States lifting its blockade of Iranian ports. An end to the fighting in Iran and Lebanon would also be an important point for Tehran. In addition, US sanctions on Iranian exports of oil and petrochemical products will be suspended as soon as the memorandum is signed.

The memorandum provides for a sixty-day negotiation period on the central issues: Iran’s nuclear programme and the lifting of sanctions. On the nuclear issue, discussions would focus in particular on uranium enrichment and the future of Iran’s stockpile enriched to 60%. In addition, a 300-billion-dollar fund to finance the reconstruction of the Iranian economy is expected to be established.

A signed agreement means that the two countries have recognised a shared interest. On the Iranian side, the survival of the political system in the face of an attack led by the world’s foremost military power and the main military power in the Middle East is presented as a form of victory.

Moreover, the American President’s realisation that it is impossible to achieve his objectives through war clearly constitutes a victory for Iran. The American President, who initially spoke of regime change, has ended up negotiating and signing an agreement with that same regime. This represents a complete shift in American policy.

However, questions of political legitimacy remain in Iran. Everything will now depend on the ability of the Iranian authorities to draw on the nationalism that re-emerged during the war in an attempt to restore their legitimacy among a large part of the population. In any event, the lifting of the American blockade on Iranian ports and the suspension of US sanctions should allow inflation to slow in the coming months. In the longer term, a definitive peace agreement with the United States could ultimately allow Iran to become more integrated into the global economy, provided that the necessary reforms accompany this development.

At the regional level, Iran’s ability to withstand the American-Israeli attack may have altered the balance of power and demonstrated a capacity for military response. The fact that Iran directly struck Israel in response to Israeli attacks in Lebanon, without a direct American military response, is unprecedented.

Iran’s ballistic missile programme is perceived as a central factor in this capacity for resistance. This is why European demands to include limits on this programme in the negotiations appear difficult to accept from an Iranian point of view. From a geopolitical perspective, Iran therefore appears to have increased its regional influence through this conflict.

Furthermore, the conflict will leave lasting traces. There are now strong tensions between Iran and the United Arab Emirates. In Iran, a perception has developed that the Emirates collaborated with Israel during the conflict. The question now is whether Iran and the Arab countries of the Persian Gulf will be able to move beyond these tensions. One interesting element in this regard is the active role played by the leaders of Saudi Arabia, Qatar and the United Arab Emirates in the negotiations that led to the conclusion of this memorandum of understanding[1]. More broadly, a new regional and international order appears to be emerging. The Gulf countries may have to reassess their relations with the United States and Israel after being drawn into a conflict they opposed and in which they were not truly protected by the United States.

Is a compromise on Iran’s nuclear programme conceivable and what concessions would each side be prepared to accept?

In absolute terms, a compromise appears possible.

According to the available information, the United States is reportedly demanding a twenty-year suspension of Iranian uranium enrichment, while Iran has mentioned a period of around five years or more. Some common ground could therefore exist. Regarding the stockpile of uranium enriched to 60%, a solution could also be found. Iran had already proposed diluting this stockpile to a lower level of enrichment on its own territory.

A first difficulty appears to be linked to the relatively short period planned for these negotiations. Two months seems a very brief timeframe. The negotiations that led to the 2015 agreement lasted two years. These discussions are extremely complex and raise, in particular, the question of whether the American side has the necessary expertise to negotiate lasting agreements on such technical matters. Some therefore propose sequencing the negotiations and concluding several separate agreements on different issues: uranium enrichment, the future of the stockpile enriched to 60%, or other technical aspects.

The other difficulty concerns political opposition. In the United States, part of the neoconservative camp and the most hard-line currents are strongly opposed to these negotiations. The current approach does indeed mark a break with a Republican Party tradition of rejecting any negotiation with Iran since the 1979 hostage crisis. On the Israeli side too, the government appears highly critical of these negotiations and of the signed memorandum. The attacks in southern Beirut can be interpreted as a signal of a desire to prevent the process from succeeding.

These obstacles exist, but a first step has nonetheless been taken with the signing of this memorandum of understanding.

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[1] “How the US-Iran deal came together”, Financial Times, 15 June 2026.