TEHRAN, Iran (AP) — Iran, the United States and Israel agreed Wednesday to a two-week ceasefire, as U.S. President Donald Trump stepped back from earlier warnings about devastating consequences for Iran.

However, uncertainty quickly surfaced regarding differing accounts of the ceasefire’s conditions and the reopening of the Strait of Hormuz. Iran maintained it would impose transit fees on vessels passing through the strategic waterway and would continue its uranium enrichment activities.

Trump indicated that American naval forces would remain positioned in the area, noting that U.S. warships would be “hangin’ around” the strait, a passageway that carries roughly 20% of the world’s oil and natural gas during peacetime. Their presence could become a source of renewed tension in the coming days.

Conflicting accounts of ceasefire terms

Trump initially claimed that Iran had submitted a “workable” 10-point proposal aimed at ending the conflict that began on Feb. 28 when he launched military action alongside Israel. He later dismissed the same proposal as deceptive without providing further details. The dismantling of Iran’s nuclear program has been described by Trump as a central objective of the campaign.

Israel endorsed the U.S.-brokered ceasefire with Iran. However, Prime Minister Benjamin Netanyahu clarified Wednesday that military operations against Hezbollah in Lebanon would continue, contradicting statements from Pakistan, which had played a mediating role and suggested the truce extended to Lebanon.

Later Wednesday, Israel’s military reaffirmed that it was continuing combat operations and ground maneuvers against Hezbollah forces.

Pakistan announced that formal discussions to solidify a broader peace framework could begin in Islamabad as early as Friday. While Pakistan said the ceasefire would take effect immediately, Iran proceeded with attacks targeting Gulf Arab nations and Israel shortly afterward.

Global markets reacted swiftly. Oil prices declined and stock markets in Asia rose following the late agreement to reopen the strait.

In Tehran, pro-government demonstrators gathered in the streets chanting anti-American and anti-Israeli slogans after news of the ceasefire broke. Some protesters burned U.S. and Israeli flags, highlighting the fury among hard-liners who had anticipated a prolonged and potentially catastrophic conflict.

Iran and Oman to collect shipping fees in Strait of Hormuz

Iranian Foreign Minister Abbas Araghchi stated that maritime traffic through the Strait of Hormuz would resume under Iranian military supervision. It remained unclear whether this arrangement would fully restore unrestricted passage.

According to a regional official familiar with the negotiations, both Iran and Oman would be authorized to levy fees on ships transiting the strait. The official said Iran intended to use the revenue to fund reconstruction efforts following weeks of conflict.

Such a policy would represent a significant departure from the long-standing principle of free transit through international waterways. Gulf Arab states, many of which suffered repeated strikes on their energy infrastructure during the war, are likely to oppose any arrangement that imposes additional financial burdens.

Trump suggested that the arrangement could provide Iran with substantial economic benefits, saying the country could begin rebuilding with the new income.

Ceasefire leaves major issues unresolved

It remains uncertain what will happen once the two-week ceasefire expires.

There is little indication that Iran and the United States have resolved core disputes concerning Iran’s nuclear activities, its ballistic missile program, or its support for regional armed groups — all of which were cited by Washington and Israel as reasons for initiating military action.

Beyond control of the strait, Iran has called for the withdrawal of U.S. combat forces from the region, the lifting of economic sanctions and the release of frozen Iranian assets as conditions for a lasting peace.

Those demands are widely viewed as unacceptable to Trump and likely to other Western governments. Iran’s temporary control over the strait disrupted global markets and intensified pressure on Washington to reach a settlement.

Since the conflict began, Trump has repeatedly delayed deadlines at the last moment. On Tuesday, he said his latest decision followed conversations with Pakistan’s Prime Minister Shehbaz Sharif and the country’s army chief, Gen. Asim Munir.

A senior Israeli official stated that the United States coordinated the ceasefire terms with Israel ahead of the announcement. The official credited what was described as severe damage to Iran’s infrastructure for securing the agreement.

Speaking anonymously about private diplomatic exchanges, the official added that Washington had pledged to push for the removal of nuclear materials from Iran and the dismantling of its ballistic missile capabilities.

Airstrikes strike Iran as regional attacks continue

Missile warnings sounded across the United Arab Emirates, Israel, Saudi Arabia, Bahrain and Kuwait shortly after the ceasefire was announced. Officials reported that a gas processing facility in Abu Dhabi caught fire following an Iranian strike.

By late March, more than 1,900 people had reportedly been killed in Iran, though authorities have not provided updated casualty figures in recent days.

In Lebanon, where Israeli forces continue to battle Iran-backed Hezbollah militants, over 1,500 people have died and approximately 1 million have been displaced. Eleven Israeli soldiers have been killed.

Across Gulf Arab countries and the occupied West Bank, more than two dozen people have died. Israel has reported 23 fatalities, while 13 U.S. service members have also been killed during the conflict.