Hopes rise for Iran peace deal, but nuclear dispute remains unresolved

Optimism has grown that the Iran war may be nearing an end after reports that a Pakistani-mediated diplomatic push has achieved progress on key sticking points, even as Tehran insists its nuclear dispute with the United States remains unresolved.

A senior security source told Reuters that a potential deal was "closing in", with Washington seeking a breakthrough before a two-week ceasefire expires next week. The source said Pakistan's army chief Field Marshal Asim Munir had made progress on "sticky issues" during his regional shuttle diplomacy.

Iran, however, struck a more cautious tone, saying fundamental differences over its nuclear programme persist and warning that no final agreement has been reached.

Field Marshal Munir travelled to Tehran on Wednesday following talks in Islamabad that ended without a formal agreement. His visit, officials said, was aimed at preventing a return to full-scale conflict and supporting efforts to extend the fragile ceasefire.

A senior Iranian official told Reuters the visit had raised hopes for a second round of negotiations and a possible extension of the ceasefire. A separate government source said talks were expected "soon" in Islamabad, although no date has been confirmed.

The Pakistani delegation reportedly carried messages linked to US-Iran indirect negotiations, as Washington and Islamabad both signal growing optimism over a possible settlement.

Ceasefire extension

US President Donald Trump has publicly spoken in favour of an agreement, suggesting it could open the Strait of Hormuz, a critical global energy route. A security source said Washington is offering sanctions relief and the unfreezing of billions of dollars in Iranian assets as part of a broader deal framework.

Karoline Leavitt, White House press secretary, said the US remains "very much engaged" in negotiations, while denying that Washington had formally requested a ceasefire extension. She added that prospects for a second round of talks, likely in Islamabad, appeared strong, reports The Guardian.

Nuke programme remains core dispute

The US is reported to have proposed a 20-year suspension of Iran's nuclear activities, while Iranian negotiators have suggested a shorter pause of three to five years.

Washington is also demanding removal of highly enriched uranium (HEU) from Iranian territory, while Tehran insists on lifting international sanctions. Sources indicated limited convergence, with Iran considering partial export of its HEU stockpile, although no final compromise has been reached.

Regional diplomacy expands

Pakistan's diplomatic engagement has extended beyond Iran. Prime Minister Shehbaz Sharif has begun a regional tour covering Saudi Arabia, Qatar and Turkey to build broader support for peace efforts.

The wider regional dimension also includes discussions on Lebanon, where Israel is engaged in parallel hostilities with Hezbollah. Pakistan said any Iran-related settlement would likely require a broader ceasefire framework in Lebanon.

Israeli officials have reportedly discussed a possible ceasefire, while US President Trump suggested that Israeli and Lebanese leaders could speak directly for the first time in decades. Lebanese officials, however, have denied any imminent direct contact.

On the ground, violence has continued in southern Lebanon. A senior Lebanese security official said an Israeli strike destroyed a key bridge linking southern Lebanon to the rest of the country.

Lebanese state media reported at least one civilian death in a separate strike targeting a vehicle near the Syria border. Israel's military had no immediate comment on the incidents.

Global financial markets have responded strongly to shifting ceasefire expectations, with equities rallying to record highs on hopes of de-escalation.

However, oil prices rose amid uncertainty over the durability of any agreement and the potential reopening of the Strait of Hormuz, through which a significant share of global crude shipments passes.