US President Donald Trump and Iranian President Masoud Pezeshkian have digitally signed a landmark 14-point “Islamabad Memorandum of Understanding”, ending months of conflict and setting in motion an ambitious process that envisages a permanent ceasefire, reopening of the Strait of Hormuz, sweeping sanctions relief for Tehran and international oversight of Iran’s nuclear programme.The accord, mediated by Pakistan, commits Iran, the US and their allies to the immediate and permanent termination of military operations on all fronts, including Lebanon, and bars future use of force against each other.The two sides have agreed to negotiate a final settlement within 60 days, extendable by mutual consent.As part of the initial implementation, Washington will begin dismantling its naval blockade against Iran and fully remove it within 30 days, while Tehran has undertaken to restore commercial navigation through the Strait of Hormuz and adjoining waters free of charge for an initial 60-day period.At the heart of the agreement lies a broad understanding on sanctions and Iran’s nuclear programme.The US has undertaken to terminate all categories of sanctions against Iran, including UN Security Council sanctions, International Atomic Energy Agency (IAEA) Board resolutions and unilateral US primary and secondary sanctions, under a mutually agreed schedule to be incorporated into the final agreement.Pending the lifting of sanctions, the US Treasury will immediately issue waivers permitting the export of Iranian crude oil, petroleum products and derivatives, along with associated banking, insurance and transportation services.Washington has also agreed to unfreeze Iranian funds and assets and make them fully available for use, with modalities to be worked out during the negotiations.On the nuclear issue, Iran has reaffirmed that it will neither acquire nor develop nuclear weapons. Both countries agreed to address Tehran’s stockpile of enriched material through a mutually agreed mechanism, with the minimum requirement being on-site downblending under the supervision of the IAEA.The memorandum further provides for discussions on uranium enrichment and other matters connected with Iran’s civilian nuclear requirements.The US, together with regional partners, has also committed itself to developing a reconstruction and economic development package worth at least $300 billion for Iran, with details to be finalised within 60 days.Pending the conclusion of the final agreement, Tehran will maintain the status quo in its nuclear programme, while Washington has pledged not to impose fresh sanctions or deploy additional military forces in the region.An executive mechanism will be established to oversee the implementation of the memorandum, while any final settlement reached by the two sides is to be endorsed by a binding UN Security Council resolution.The Swiss government confirmed on Thursday that the US and Iranian negotiators would meet on Friday at the Buergenstock resort near Lucerne to begin work on unresolved provisions of the agreement.Despite the diplomatic breakthrough, Tehran insisted that its ballistic missile programme would remain outside the scope of the negotiations. Iranian Foreign Minister Abbas Araghchi said the country’s missile capabilities were “non-negotiable”.The reopening of the Strait of Hormuz, through which nearly a fifth of the global oil supplies transit, is expected to ease pressure on energy markets and restore commercial shipping disrupted by the conflict.Should the process succeed, the accord could mark the most significant US-Iran rapprochement since the 1979 Islamic Revolution.