An Analysis of the U.S.-Iran Memorandum of Understanding
Following the U.S. and Iranian signing of a Memorandum of Understanding to bring Operation Epic Fury to a close, Perry World House turned to a group of experts to provide insight into and analysis of the agreement and what it means for U.S. policy toward Iran moving forward. All contributors are speaking in their personal capacity as experts and do not represent the views of Perry World House or the University of Pennsylvania.
When Enemies Become Partners: The Real Art of the Deal
Firoozeh Kashani-Sabet is the Walter H. Annenberg Professor of History at the University of Pennsylvania.
Nelson Mandela is known to have said, “To make peace with an enemy, one must work with that enemy, and that enemy becomes one’s partner.” Mandela’s fight in eradicating apartheid from South Africa was very different from the nearly five-decades-long feud between the United States and Iran. Yet the logic of negotiation he championed to bring change and eventually peace underpins the diplomatic breakthrough that has led to the long-awaited Memorandum of Understanding (MoU) between Iran and the United States following the two attacks on the Islamic Republic in June 2025 and February 2026.
After several weeks of intense fighting that cost thousands of lives, including the murder of 168 schoolchildren on the first day of the war, President Trump and his advisors appear to have acknowledged the limits of military force in pressuring the Islamic Republic to cave in. This agreement provides some immediate remedies: the cessation of hostilities, the lifting of the naval blockade on Iran, and the safe passage of ships through the Persian Gulf and the Sea of Oman. In addition, the MoU provides $300 billion to assist with Iran’s postwar reconstruction, while the Islamic Republic agrees to abandon the pursuit of nuclear weapons. However, the MoU also does not mention Israel by name, indicating a break from initial war objectives and the ultimate settlement of regional differences.
By conceding many of Tehran’s longstanding demands, this MoU marks an unprecedented development. The MoU provides formal recognition of the Islamic Republic’s political sovereignty—denied since 1979, given that the revolution was immediately followed by the unfortunate and disastrous hostage-taking of U.S. embassy personnel—alongside commitments to withdraw U.S. forces from Iran’s vicinity and to refrain from meddling in its domestic affairs.
For a country facing repeated foreign interference, military incursions, and frontier insecurity, such provisions, if upheld, represent an extraordinary achievement. For one, Iran’s core security concerns in the Persian Gulf have, in part, been met. With diminished external pressures on Iran’s borders, drawn up during an era of colonialism intended to keep it encircled and insecure, Tehran may now feel confident enough to reorient its regional behavior.
At the same time, this MoU shows that ideologies rooted in irrational hatreds never achieve their objectives. In the end, both sides have been forced to abandon dogma in favor of pragmatism. The drawbacks of decades of hateful rhetoric leading to war have finally convinced America and Iran to acknowledge that making peace with the enemy brings more benefits than chasing an endless war.
For Iran, the agreement marks not only a foreign policy milestone but also a domestic reckoning. The MoU strengthens the hand of those who seek restraint and negotiation. The success of the agreement will depend on whether Iranian statesmen find a way to accommodate differences and dissent. It will also hinge on the behavior of regional countries, whose willingness to de-escalate will determine its outcome.
Mandela’s insights resonate here, as the United States and the Islamic Republic look to turn their enmity into an untested partnership of sorts. The real art of the deal will lie in knowing how to win through peace, not war.
A Worse Iran Deal
Marie Harf is the executive director at Perry World House. She was the deputy spokesperson for the U.S. Department of State and senior advisor for strategic communications to Secretary John Kerry during the JCPOA negotiations.
For years, Donald Trump and his fellow Republicans excoriated the Obama administration’s 2015 agreement with Iran—the Joint Comprehensive Plan of Action (JCPOA)—that destroyed Tehran’s ability to make a nuclear weapon. They said the restrictions were not tough or lengthy enough, there was too much sanctions relief, and the deal did not include prohibitions on Iran’s missile program or support for terrorist proxies. As a State Department official tasked with making the public case for the JCPOA at the time, I can attest to how vitriolic the anti-deal media campaign was, with many opponents of the deal said plainly that they never thought it was possible to resolve anything diplomatically with Iran and instead advocating for war, a conflict they eventually got with Operation Epic Fury.
Ironically, the Memorandum of Understanding (MOU) that Trump himself signed this week with Iran falls far short on all of those accounts and many more. It includes no details about any restrictions on Iran’s nuclear program and is silent on its missiles and terrorist proxies. At the same time, it commits the United States to lift ALL sanctions eventually and pledges $300 billion from the United States and its partners to rebuild Iran, plus allowing leaders in Tehran access to all of their frozen assets to spend however they like (funding Hezbollah, for example). And it requires the United States to withdraw its military forces from the region. In this Memorandum, Iran got a number of new concessions from the United States, while Washington got none from Iran.
Starting this war with no plan was not, though, the moment when the Trump administration lost its leverage with Iran. That milestone came in 2018, during the first Trump administration, when the President tore up the JCPOA and put the United States in violation of its terms. Iran responded months later by restarting its nuclear program, free to do so unmoored from the JCPOA’s constraints (and cameras and inspectors). That fateful decision led to where we are today, with Iran holding all the cards, many of which it played to its benefit in these negotiations.
An Astronomical Cost for a Bad Deal
Daniel Schneiderman is the director of Global Policy Programs at Penn Washington. He has worked across the Middle East policy in various roles in the U.S. government, including on Iran’s support of state and nonstate proxies in the region.
American negotiators are likely relieved to have found a way to get the Iranians to open the Strait of Hormuz to free passage. A deal that foregrounds a negotiated solution and lowers the likelihood of long-term conflict helps prevent the war’s global economic contagion from worsening. Sadly, the terms of this deal also lay bare how fundamentally flawed the decision to go to war in the first place was. The lack of a strategy meant from the beginning that the cost of ending it would be astronomical.
- The sanctions relief the Memorandum of Understanding (MOU) would provide is comprehensive. Removing sanctions may help talks progress but does not resolve any of the other stated war aims while sacrificing the most powerful form of U.S. leverage.
- The MOU requires the United States to “issue waivers for the export of Iranian crude oil, petroleum products and derivatives, and all associated services, including banking transactions;” this means immediate significant revenue streams flowing in to provide the Iranian government with economic relief at its most vulnerable moment.
- The MOU also allows free and open flow of shipping only for the 60-day period of negotiations, with the text then envisioning an Iranian-Omani led dialogue with other Gulf states to develop a plan for traffic in the Strait of Hormuz. This leaves open the idea of accepting an Iranian tolling system, even if thinly disguised as “fees”.
- American and Gulf governments may have to cobble together $300 billion for Iran’s reconstruction, with none of it guaranteed to be used for the direct benefit and relief of the Iranian people.
This price is especially high when compared to what the international community had to give to get the 2015 Joint Comprehensive Plan of Action (JCPOA), a deal that had an international coalition and real enforcement and verification mechanisms behind it (which this deal does not yet have). It seems possible a better deal than this one could have been reached before the United States and Israel conducted strikes in June 2025—or even before Operation Epic Fury began in February—if the diplomatic efforts underway had been given more opportunity to produce an agreement or lent more political will for compromise. There’s also a very real possibility that the United States and Iran return to war—though given what the United States has given up to end this phase of the conflict, its clear political will exists on the U.S. side to try and definitively end it.
We may come to see this deal as the best of what was possible at the time, but concerns about the longer-term implications for global nonproliferation efforts and U.S. policy and presence in the region remain.
