The cessation of active military hostilities between the United States and the Islamic Republic of Iran culminated in a Memorandum of Understanding (MoU) scheduled to be signed on June 19 in Switzerland. Despite abundant media coverage, there are very few facts that shed light on the details of that hotly debated deal. No party has released the wording of the MoU. Most commentary on the MoU focuses not on its actual content but on its interpretations in the global and Iranian media. Suffice it to say that the Iranian media likewise refers to a tafahom(MoU). 

This is the second agreed-upon fact (besides the mutually agreed-upon signing date). Since it is an MoU rather than a treaty or agreement, its terms are inherently less binding and more limited than those of a treaty. It is not a “peace agreement” either. Thus, assessing the true strategic balance of this new paradigm requires moving beyond the Islamic Republic’s nationalist propaganda and superficial declarations of victory. Taking the IRGC’s declarations of victory at face value is misleading because Iranian propaganda always boasts of glorious victories irrespective of the real situation. 

The Supreme National Security Council of Iran (SNSC) approved the MoU; however, it has not released any official text. Its laconic wording contains a forward-looking statement: “Negotiations for a final agreement will be postponed until after the other party has fulfilled its obligations under the Memorandum of Understanding. The Islamic Republic of Iran appreciates the efforts of the Islamic Republic of Pakistan and the Government of Qatar.” This indicates that the regime considers the MoU neither final nor a treaty, let alone a peace agreement. In other words, there have been no negotiations toward a final agreement to date. Resumption is contingent on the compliance of the other party to the deal, the U.S., and it will be Iran that decides whether Washington has fulfilled its commitments. In addition, there are no signs that the American troops and weaponry deployed in the Gulf are about to be withdrawn.

Boasting Victory in the Face of Economic Devastation

In conventional military terms, the coalition forces of the United States and Israel achieved undeniable tactical and strategic superiority. Israel and the U.S. destroyed not only Iran’s nuclear installations and the bulk of its ballistic missile arsenal but also the country’s military-industrial complex. The breakdown of the military-industrial complex makes Iran’s military rebuilding next to impossible in the short to medium timeframe The imposition of a crippling U.S. naval blockade successfully paralyzed Iran’s southern commercial and petroleum ports, choking off vital oil exports. By all objective macroeconomic accounts, the Iranian economy has been decimated. Inflation has surged past 80%, peaking in some market indices at a staggering 123%, while the Iranian rial has reached catastrophic lows.

Despite this infrastructural and economic devastation, Iranian state officials have aggressively sought to redefine the parameters of victory. Esmail Saqab Esfahani, Vice President and Head of the Energy Optimization and Strategic Management Organization, characterized the conflict as a “third imposed war” (sovvomin jang-e tahmili), deliberately invoking the brutal 1980s Iran-Iraq War. Addressing the stark asymmetry, Esfahani noted that Iran faced an adversary with a gross domestic product approximately 15 times larger and argued that mere survival—avoiding military occupation and the collapse of the political system—constitutes a strategic triumph. He admitted that the country’s energy infrastructure sustained “serious” damage, forcing the state to prioritize household electricity and gas consumption over industrial output to prevent mass civil unrest.

Internal Coercion and the Illusion of Legitimacy

 “Common wisdom” holds that external conflicts unify fractured populations. However, empirical evidence indicates that the regime has gained no genuine domestic legitimacy from this crisis. Having exhausted its macroeconomic toolkit, the state relies entirely on coercion and crowd deterrence, effectively weaponizing the judicial and intelligence sectors against its own citizens. Contrary to some hyped fears, nothing even close to a rallying-around-the-flag effect was observed in Iran. 

In Isfahan Province, the judiciary launched aggressive economic punitive measures. The head of the Isfahan judiciary, Asadollah Jafari, ordered the immediate identification and seizure of assets belonging to 100 individuals accused of “supporting the enemy.” Jafari equated domestic economic disruption with “playing into the hands of the enemy,” using the wartime environment to confiscate wealth and arbitrarily criminalize economic distress. Furthermore, state paranoia about controlling information highlights profound insecurity. In Pishva County, the IRGC Intelligence Service arrested an individual less than four hours after he allegedly transmitted civilian footage of an incoming missile strike to opposition networks located outside of Iran. This draconian response demonstrates the state’s fear that any leak of military vulnerability could ignite domestic unrest.

The Nuclear Capability: Degradation and Domestic Spin

The events of the past months have fundamentally altered the trajectory of Iran’s nuclear ambitions. The highly protected chain of industrial, military, and scientific resources required for rapid weaponization has suffered severe setbacks. Crucially, the terms of the MoU explicitly cap Iran’s progress.

According to statements by the U.S. executive, the MoU stipulates that Iran will be forever limited to low-level enrichment. Interestingly, the Iranian state apparatus has masterfully repurposed this limitation for domestic propaganda. Outlets ranging from the government-run IRNA to the hardline Tasnim seized on the U.S. concession to allow “low-level enrichment.” By contrasting this with historical U.S. maximalist demands for absolute zero enrichment, Tehran has attempted to sell the MoU to its domestic populace as a diplomatic victory that preserves the nation’s scientific rights. Nevertheless, in practice, Iran is permanently capped at a threshold level and lacks the permissible infrastructure to actualize a weapon without facing devastating, preemptive retaliation. Again, nothing concrete is known because even if both parties sign the MoU, its status is lower than that of an agreement; therefore, it is illogical to compare it to the 2015 Joint Comprehensive Plan of Action (JCPOA) nuclear accords.

Factional Warfare over a Fragile “Tafahom”

The durability of the June 19 MoU is inherently fragile, resting on a volatile foundation of mutual mistrust and intense political polarization in Tehran. The agreement remains classified, sparking a firestorm among Iranian hardliners and exposing deep divisions within the conservative establishment.

The Supreme National Security Council (SNSC) confirmed that the MoU only conditionally halts operations, delaying final negotiations until Washington lifts its naval blockade. The ultra-hardliner backlash to this phased approach is both public and fierce. MP Malek Shariati publicly criticized the Foreign Ministry, asserting there is “no room for any congratulations” given the profound distrust of the U.S. The  firebrand MP Mahmoud Nabavian claimed the concessions are worse than those in the JCPOA, stating that signing the deal amounts to telling the enemy to “come sit on our chest”.

The conservative flagship daily Kayhan explicitly warned against the agreement to reopen the Strait of Hormuz ”toll-free,” noting that surrendering control of this strategic waterway would neutralize Iran’s primary asymmetric maritime leverage and increase vulnerability.

Strategic Outlook and Concluding Assessment

Will the balance hold? The Iranian regime currently faces a profound geopolitical dilemma: publicly cede strategic ground and risk severe blowback from its ultra-hardline base, or stubbornly refuse diplomacy and jeopardize its physical survival. By intentionally designating the limits proper to a MoU , the executive branch is skillfully exploiting Washington’s desire for closure while bypassing the paralyzing legislative vetoes of its own parliament. Previously, the parliament had no role whatsoever because Khamenei ruled by final verdict. Today, however, the “Front of Steadfastness” (jabhe-ye paydari), a faction that unites the staunchest ideologues of the Iranian regime, harshly opposes even this MoU. Hardline MP and member of the National Security Commission Mahmoud Nabavian argued that the final draft of the MoU contained more concessions than the two previous ones. He even urged judicial action against officials he accused of promoting “capitulation to the terrorist U.S. government through misleading statistics.” Unlike before, it seems that the senior IRGC officers, who are now at the helm in Iran, cannot afford to ignore this harsh opposition from “tougher” ideological hardliners. 

However, this diplomatic maneuvering does not indicate that Iran is negotiating from a position of strength. To the contrary, it reflects a desperate tactical pivot toward survival. Tehran may have traded its most potent asymmetric assets—unfettered nuclear advancement and untethered maritime disruption—for immediate economic life support. Even if the MoU is anything but a peace agreement, it does not mean that a fresh war is inevitable: the Iranian regime needs a war situation, not the war itself. It needs a war emergency to justify ongoing oppression and economic inaction.

One must hold in mind that absent war, its control of the population would become even more difficult.

If the regime was not interested in any arrangement, it would not have engaged in negotiations with Washington. Currently, it faces a dilemma it never imagined: either give up its principles or jeopardize its survival. It cannot afford to cede anything, as such a step would be interpreted as surrender and would inevitably pose a political risk, while it can hardly afford another war. No Iranian strategist has ever foreseen a situation in which the country loses its strategic trump cards, namely the nuclear program and asymmetric warfare, including its proxies. Nevertheless, the Iranian regime is skillfully exploiting America’s weakness, namely the desire to conclude a deal. Yet this capacity to exploit the rival’s weakness does not mean Iran is winning or getting stronger. 

The current situation is far from perfect, yet it is of utmost importance to remember that even if the MoU enters into force and holds, it is only a pause, or perhaps another stage of the game, but not its final stage. As of now, the Iranian regime cannot project power.

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