The U.S. and Iran are moving closer to a temporary framework agreement aimed at halting the war and creating a pathway toward a broader long-term ceasefire, according to multiple officials and sources familiar with the negotiations.

While major disputes remain unresolved, growing optimism that the conflict may not re-escalate in the near term has already fueled a sharp market rally, sending global equities toward record highs and pushing oil prices sharply lower.Brent crude fell another 3% Thursday after tumbling nearly 8% in the previous session, while Nasdaq 100 future reached record high.

The emerging proposal centers on a short-term memorandum of understanding (MOU) rather than a comprehensive peace accord, highlighting the deep divisions that still separate Washington and Tehran. Still, officials say both sides increasingly view an interim arrangement as the most realistic path to prevent renewed conflict and stabilize energy flows through the Strait of Hormuz.

Under the current framework, the process would unfold in three stages: formally ending the war, resolving the shipping crisis in the strait, and launching a 30-day negotiation window for a broader nuclear and sanctions agreement.

Sources said the U.S. and Iran, working through mediators, are drafting a one-page, 14-point memorandum that would define the parameters for those talks. Negotiations could resume as early as next week in Islamabad.

Among the key provisions under discussion

  • Iran would ease restrictions on shipping through the Strait of Hormuz.
  • The U.S. would gradually scale back its naval blockade during the negotiation period.
  • Tehran has shown openness for the first time to discussing aspects of its nuclear program.
  • Both sides are discussing the possible transfer of some highly enriched uranium stockpiles outside Iran.
  • Iran would potentially suspend portions of its enrichment activity, though the duration remains unresolved.
  • Sanctions relief from the U.S. would be phased in gradually, though the scope remains a major sticking point.

Despite progress, several contentious issues remain unsettled. Iran continues to oppose transferring nuclear material to the U.S., while disagreements persist over how long any enrichment moratorium would last and what role Tehran would maintain in overseeing transit through the strait.

The proposed framework also avoids some of Washington's previous demands that Iran has firmly rejected, including limits on its missile program and ending support for proxy groups such as Hezbollah.

A senior Pakistani official involved in mediation said the immediate priority is ending the war itself.

"Our priority is that they announce a permanent end to war, and the rest of the issues could be thrashed out once they get back to direct talks," the official said.

Donald Trump has continued to project optimism about a breakthrough. "They want to make a deal... it's very possible," Trump told reporters Wednesday, adding later that "it'll be over quickly."

The White House also confirmed Trump agreed to pause a newly launched U.S. naval operation designed to escort ships through the Strait of Hormuz, citing progress in negotiations. The move came after concerns from regional allies, particularly Saudi Arabia, according to reports.

Still, military tensions remain elevated. U.S. Central Command said American forces disabled an Iranian-flagged tanker attempting to approach an Iranian port on Wednesday, underscoring the fragile nature of the current ceasefire environment.

Inside Iran, reactions to the U.S. proposal have been mixed. The Iranian Foreign Ministry confirmed Tehran is reviewing the framework, while several Iranian lawmakers publicly criticized the plan as overly favorable to Washington.

Iranian Parliament Speaker Mohammad Baqer Qalibaf mocked reports of imminent progress, suggesting U.S. officials were exaggerating momentum after failing to fully reopen the strait.

Even so, officials cautioned that no final agreement has been reached and that the proposed framework could still collapse if negotiations stall. Trump also warned Wednesday that the U.S. would resume bombing Iran if Tehran refuses to reach a deal.