US and Iran Agree to Two-Week Ceasefire, Talks to Begin

ISLAMABAD (Azat TV) – A fragile two-week ceasefire between the United States and Iran has been brokered, averting a potentially catastrophic military escalation. The agreement, reached in the final hours before a deadline set by U.S. President Donald Trump, includes Iran’s commitment to reopen the Strait of Hormuz, a critical chokepoint for global oil supply.

Ceasefire Averts Escalation, Diplomacy Takes Center Stage

The truce was announced on Wednesday, with President Trump stating that the U.S. would suspend its bombing campaign for two weeks, contingent on Iran fully reopening the Strait of Hormuz. Iran’s Foreign Minister, Seyed Abbas Aragbchi, confirmed Iran’s acceptance, assuring that safe passage through the waterway would be possible under coordination with Iranian armed forces. This development was facilitated by intensive diplomatic efforts led by Pakistan, with Prime Minister Shehbaz Sharif and Army Chief General Asim Munir playing pivotal roles in mediating between the two nations. Aragbchi expressed gratitude to Pakistan’s leadership for their tireless efforts in ending the conflict.

Iran’s Peace Proposal and US Response

The current ceasefire is not a peace agreement but rather a basis for negotiations. Iran has put forth a 10-point proposal, which President Trump described as a “workable basis on which to negotiate.” While details of the plan have not been fully published, reports suggest it includes the withdrawal of U.S. combat forces from the region, the lifting of sanctions, and continued Iranian control over the Strait of Hormuz. Formal talks are scheduled to begin on Friday in Islamabad, with both sides reportedly having conveyed their positions via Pakistan. However, significant gaps remain between the stated positions of the U.S. and Iran, and conflicting signals regarding the ceasefire in Lebanon, along with reports of missile alerts in Israel and the UAE shortly after the announcement, underscore the fragility of the current situation.

Market Impact and Economic Repercussions

The six weeks of conflict prior to the ceasefire inflicted considerable damage on global markets. Energy markets bore the brunt, with WTI crude oil futures surging 69% and European natural gas prices rallying 61%, driven by the closure of the Strait of Hormuz and strikes on power facilities. Equities suffered broadly, particularly in Asia, with South Korea’s KOSPI experiencing a 19% drawdown. The U.S. Dollar Index advanced approximately 2%, while the Swiss franc gained 4% due to safe-haven demand. Conversely, Asian emerging market currencies faced severe pressure, with several falling to record lows. Government bonds also saw a sell-off, with yields rising due to anticipated inflationary pressures from elevated energy costs. Gold and silver experienced declines as real rates increased.

Expert Analysis on Lasting Peace

Peacebuilding experts view the current ceasefire as a welcome moment of relief but caution that building lasting peace remains a complex endeavor. Darren Kew, dean of the Joan Kroc School of Peace Studies at the University of San Diego, noted that while President Trump’s unconventional negotiating style might have played a role in securing the immediate truce, its effectiveness at the global level is uncertain due to the higher stakes involved. He suggested that the best achievable outcome in the short term might be a codified ceasefire, extending the current de-escalation indefinitely. However, Kew expressed concern that the U.S. may have lost some of its global initiative and could find itself in a reactive position regarding international relations and the global economic order.

The current ceasefire, while a critical de-escalation, highlights the precarious balance of power and the deep-seated geopolitical complexities that require sustained diplomatic engagement beyond the immediate crisis.