The United States and Iran have agreed to extend their ceasefire for an additional 60 days, averting a potential escalation just days before the current truce was set to expire on August 17 under the Islamabad Memorandum of Understanding. Pakistan, which mediated the original ceasefire in April, continues to serve as an intermediary in the dispute.
The two sides signed the memorandum on June 17 to launch negotiations covering navigation through the Strait of Hormuz, sanctions, frozen Iranian assets, reconstruction, and Iran's nuclear programme. However, talks stalled over disagreements on security guarantees and freedom of navigation. Between July 8 and 24, both sides exchanged military strikes, with Washington hitting targets inside Iran and Tehran retaliating against US military facilities in Jordan, Bahrain, and Kuwait.
The extension buys time as the US had pledged to help develop a $300 billion Iranian reconstruction and economic development programme.