Introduction
The U.S.–Iran memorandum of understanding signed in mid-June 2026 abruptly changed the course of the United States-Israeli campaign against Iran launched in February. Iran agreed to reopen the Strait of Hormuz to commercial shipping, and Washington responded with a promise of immediate economic relief, including permission for Tehran to resume oil exports. The hardest issues were left unresolved. Sanctions relief, frozen assets, the creation of an investment fund, and the future of Iran’s nuclear program were all pushed into negotiations over a permanent agreement during an extendable sixty-day transition period. *
The memorandum marked the transition from a military campaign to a diplomatic phase. It is the beginning of a highly sensitive interim period in which the parties will have to translate preliminary understandings into a binding political framework. Divergent readings of the text, conflicting expectations, and domestic political constraints could slow the talks, destabilize them, or prevent a final agreement altogether, opening the door to renewed escalation.
The move from military conflict to a diplomatic settlement creates a basic tension between the rhetoric of victory and resistance and the need to reach compromises and understandings with the adversary. Iran now illustrates this dilemma clearly. Tehran presents the memorandum of understanding as a strategic achievement, yet it must also justify negotiations with the United States without weakening the regime’s ideological legitimacy. The continued chants of “Death to America” heard in Iran after the memorandum entered into force, together with Supreme Leader Mojtaba Khamenei’s statement that he approved the agreement only after Iran’s rights and the interests of the “resistance front” had been secured, reflect that tension.
Iran’s post-memorandum dynamics will shape the next stage of U.S.–Iranian negotiations. The process will not be determined by the agreement’s content alone, but also by the Iranian leadership’s ability to move from a military campaign it portrays as an achievement to a diplomatic arrangement that may require compromises and concessions alongside gains. Three points of friction stand out during the interim period: the future of control over the Strait of Hormuz, Lebanon, and the political-ideological struggle inside Iran over the meaning and limits of the memorandum. The U.S.–Omani effort to advance use of the southern route through the strait, together with the trilateral agreement among the United States, Israel, and Lebanon, has put the memorandum of understanding to the test. They underscore Tehran’s central strategic dilemma: how to advance an arrangement with the United States without giving up its levers of influence.
The Interim Period: Between Diplomatic Achievement and Permanent Agreement
The U.S.–Iran memorandum of understanding stipulates several immediate steps, including reopening the Strait of Hormuz to commercial shipping, ending hostilities, resumption of Iranian oil exports, and initial economic relief to be provided by the United States. It also sets a sixty-day transition period for reaching a permanent agreement on the core issues, including sanctions, the nuclear program, the release of frozen assets, and regional arrangements.
Within days of the MoU being signed, it became clear that that Iran’s implementation fell short of the requirements of the memorandum. Although the parties agreed on free passage through the Strait of Hormuz, Tehran demanded that vessels carry insurance approved by Iranian authorities, refrained from opening the strait to free movement, and attacked ships that tried to cross the Gulf along the southern route near Oman’s coast. These measures indicate that Tehran seeks to preserve leverage over traffic through the strait and over the pace at which economic activity resumes.
Iran seeks to take advantage of the interim period to secure major economic gains, including sanctions relief, the release of frozen assets, and international investment. Yet, at the same time, the MoU also forces the leadership to confront the dilemma of moving from war to a diplomatic arrangement. The war reinforced the discourse of resistance, while negotiations may require compromise with the United States. Mojtaba Khamenei accordingly stressed that his approval of the memorandum did not signal trust in Washington, but rather it was a conditional agreement that preserves the interests of the “resistance front.” Continued chants of “Death to America” after the memorandum entered into force also served the regime’s effort to present the negotiations as tactical, not ideological.
The interim period is more than a technical step toward a permanent agreement. It tests the Iranian leadership’s ability to balance diplomatic and economic progress with ideological pressure at home. The wider the gap between the parties’ expectations and their readings of the agreement, the greater the risk to the process as a whole.
Lebanon As a Test of the MoU: Iran’s Commitment to the “Resistance Front”
Lebanon is emerging as one of the most sensitive points of dispute between Iran and the United States. Sanctions and the nuclear program can be negotiated bilaterally between Tehran and Washington; Lebanon cannot. Israel and Hezbollah are direct actors there, making implementation of the memorandum of understanding far more difficult.
The U.S.–Israel–Lebanon agreement has exposed a basic divide. Washington and Jerusalem view it as a framework for strengthening Lebanese sovereignty, reducing Hezbollah’s military power, and curbing Iran’s role in Lebanon. Tehran sees a threat to the “resistance front” and to one of its main instruments of regional influence. It has therefore made Israel’s withdrawal from southern Lebanon the primary test of its success.
Iranian officials reinforced that position after the signing of the memorandum. A Foreign Ministry spokesman warned that continued Israeli strikes in Lebanon would count as a violation of U.S. commitments. Security figures and media outlets identified with the Islamic Revolutionary Guard Corps went further, calling for developments in Lebanon to be linked to freedom of navigation in the Strait of Hormuz. The message was clear: Tehran will not accept progress in the talks with Washington at Hezbollah’s expense. For now, however, Iran has not turned its threats into action.
Washington and Tehran continue to interpert the memorandum from differing viewpoints. Washington stresses that the agreement does not limit Israel’s freedom of action in response to security threats. Tehran presents Hezbollah as Lebanon’s legitimate defender and as a central component of Iran’s regional security architecture. For Tehran, Hezbollah’s power is not merely a Lebanese matter; it is a core element of Iranian national security.
Lebanon has thus become a test of Iran’s ability to move from war to a diplomatic arrangement. If Tehran insists on its own reading of the agreement, it could delay the negotiations and make a permanent agreement harder to reach. If it comes to terms with continued Israeli activity in Lebanon, it risks appearing at home to have retreated from a basic principle of its regional policy. The postponement of the Swiss round of talks following the crisis in Lebanon has already shown that Lebanon is affecting the pace of diplomatic progress and could become the main factor undermining the stability of the entire process.
The Battle Over the Agreement: Iran’s Internal Debate
In addition to its regional challenges, Iran’s leadership also faces internal disputes over the meaning of the memorandum of understanding. The regime has tried to present it as a national achievement, but Iran’s political debate shows that the agreement does not command a consensus. Instead, it has revived basic disputes over the Islamic Republic’s posture toward the United States, the West, and the “resistance front.”
The Israel-Lebanon agreement has sharpened that dispute. Media outlets identified with the conservative camp have portrayed it as a concession at the expense of Hezbollah and as an Israeli achievement. Hezbollah’s leadership for its part has rejected it outright and made clear that it does not see itself as bound by the new diplomatic framework. The debate has expanded beyond Iran’s relations with the United States to include Hezbollah’s future and the place of the “resistance front” in Tehran’s regional policy.
The debate reflects a long-standing divide between the moderate camp, which sees dialogue with the West as necessary for economic recovery and Iran’s integration into the international system, and the conservative camp, which views rapprochement with the United States as a threat to the Islamic Republic’s revolutionary identity. The death of the previous Supreme Leader, Ali Khamenei, deepened this divide by removing the figure who for years had balanced the centers of power and enabled tactical compromises.
The internal tension appeared both in opposition to demonstrations against the negotiating team and in criticism voiced after the signing. Conservatives argued that Iran had not fully exploited its wartime gains and should not accept compromises that damage its sovereignty or regional standing. Reformist figures countered that the memorandum of understanding was not a concession, but a belated correction to a policy of confrontation that had driven Iran into an economic and security crisis.
Mojtaba Khamenei’s approval reduced public criticism but did not eliminate it. He stressed that he had approved the memorandum of understanding only after Iran’s rights and the interests of the “resistance front” had been secured. That gave legitimacy to continued negotiations, but it also left conservatives with grounds for continued reservations. A statement by dozens of members of the Assembly of Experts made the same point: they supported the negotiations, but emphasized the need to preserve Iran’s “red lines.” Support for the process remains conditioned on protection of the Islamic Republic’s basic principles and the standing of its regional allies.
Iran’s internal debate has moved beyond just negotiations with Washington. After the agreement with Lebanon, it now also encompasses the future of the “resistance front.” These disputes do not pose an immediate threat to regime stability, but they narrow the leadership’s room for maneuver and increase the risk that any external crisis, whether in Lebanon, the Strait of Hormuz, or over the nuclear program, will also become an internal political crisis.
Conclusion: Between Strategic Confidence and Overreach
Since the signing of the memorandum of understanding, and all the more so since the Israel-Lebanon agreement, the main challenges to the diplomatic process have come not just from the the gaps between Iran and the United States, but also from Tehran’s reading of the postwar balance of power. Iran’s leadership increasingly appears to believe that the confrontation left it in a stronger strategic position, based on its control of the Strait of Hormuz, its military capabilities, and its regional influence. That assessment is also reflected in Tehran’s insistence on retaining the pressure tools tied to its control of the strait.
Tehran’s sense of confidence could become the main source of risk during the interim period. If Iran’s leadership concludes that the United States needs an agreement more than Iran does, it may try to impose its own interpretation of the arrangement and step up its demands. The risk is especially evident in Lebanon, where the divergence between Iranian and American views of Hezbollah’s future is already affecting events on the ground and the pace of diplomatic progress.
The future of the memorandum of understanding will at the end of the day be determined less by the text of the agreement than by the parties’ ability to manage the transition period. For Iran, the key challenge will be to balance the desire to realize the gains of the arrangement with its commitment to the “resistance front,” domestic political pressures, and gaps in expectations with the United States. Success in maintaining that balance could allow the process to move toward a permanent agreement. Failure could turn the interim period into another stage of escalation between the United States and Israel, and Iran.
Senior regime figures and conservative spokesmen have projected confidence in Iran’s ability to impose its will on its adversaries through control of the Strait of Hormuz and the Bab el-Mandeb Strait. These pressure tools are likely to become Tehran’s main bargaining instruments in almost any substantive dispute that arises during the interim period. Iran sees them as effective, relatively reversible, and low-cost compared with direct military confrontation. The more Tehran concludes that Washington wants to avoid military escalation and keep the negotiations going, the more likely it is to use these tools with greater frequency and intensity.
Iranian self-confidence, together with Tehran’s firm demands on Lebanon and on preserving the status of the “resistance front,” could push it to use force as a negotiating tool and to expect further concessions from the United States and Israel. Even if Iran does not want the diplomatic process to collapse, it may treat controlled crises and pressure tactics as integral to its negotiating strategy rather than a departure from it. At the same time, ideological elements in the regime that feel Iran failed to capitalize fully on its gains may encourage Tehran to seek additional achievements in arenas that are not currently at the heart of the negotiations, including the maritime arrangement with Oman or other regional issues. Such efforts would intensify points of friction.
A different strategic dilemma is likely to emerge for Iran over the medium and long term. Gulf states, led by Saudi Arabia and the United Arab Emirates, are advancing alternative transport routes designed to reduce dependence on the Strait of Hormuz and gradually erode one of Tehran’s main pressure tools. Concern that this advantage will weaken over time may make Iran more willing to use it aggressively in the current negotiations, precisely because Tehran understands that this lever is likely to become less effective in the coming years.
The main risk during the interim period is not that Iran will withdraw from the negotiations. It is that Tehran will conduct them with a high degree of strategic confidence, and perhaps an overestimation of its ability to force further concessions from the United States and Israel through the pressure tools at its disposal. Put more simply, Iran should not be expected simply to implement the understandings already reached. It is more likely to treat the interim period as an opportunity to improve the terms of the agreement through sustained pressure, unless it becomes convinced that the cost of insistence outweighs the expected benefit. This approach is likely to reduce Iran’s willingness to compromise, increase its use of controlled crises as bargaining tools, and raise the risk of repeated escalations throughout the transition period. The parties will therefore have to do more than bridge substantive gaps; they will also have to prevent Iranian self-confidence from becoming the main obstacle to a permanent agreement.
* This paper is based on information current as of July 2, 2026. I would like to thank Daniel Hirschfeld for his comprehensive research assistance.
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