A new agreement extending the ceasefire between the United States and Iran has been signed and is now in force, according to confirmation from a White House official speaking to the BBC.

President Donald Trump formally approved the accord during the G7 summit in Evian-les-Bains, France. The agreement is expected to pave the way for the reopening of the crucial Strait of Hormuz.

The 14-point document, described as a Memorandum of Understanding (MoU), states that Iran will never acquire a nuclear weapon. It also outlines the creation of a $300bn fund aimed at Iran’s “reconstruction and economic development,” although the United States is not obligated to finance it. The deal follows four months of hostilities involving the US, Iran, and Israel.

The Trump administration has characterized the agreement as “performance-based,” meaning Iran will receive benefits only if it fulfills its commitments.

Although many aspects of the arrangement remain unclear and several major issues are unresolved, the key provisions offer insight into how both sides plan to proceed.

The opening section declares an “immediate and permanent” end to military operations on all fronts by the US, Iran, and their respective allies, including in Lebanon.

From Washington’s perspective, Trump had grown increasingly concerned that Israeli military actions against Hezbollah might jeopardize the broader understanding with Tehran.

Iran, meanwhile, has consistently insisted that Lebanon be included within the scope of the ceasefire.

A spokesperson for Iran’s foreign ministry warned that any continued Israeli military activity in Lebanon would violate the agreement and prompt an appropriate response.

The text specifies that neither side will initiate military operations or issue threats against the other and that both will respect Lebanon’s territorial integrity and sovereignty.

According to the document, these commitments are intended to lead to a permanent end to the conflict.

Israel’s response to this element of the agreement remains uncertain.

US officials, reading directly from the text during a briefing, emphasized that Washington and Tehran will respect each other’s sovereignty and refrain from interfering in domestic affairs.

This clause may be viewed unfavorably by Iranian opposition groups.

Earlier in the year, Trump had voiced support for anti-government protesters in Iran, stating that assistance was forthcoming during nationwide demonstrations.

The third provision commits both governments to negotiate a comprehensive final agreement within a maximum of 60 days, with the possibility of extension if both sides agree.

That 60-day period began once the MoU was formally signed by the leaders of both countries.

The White House confirmed that Trump signed the document during a dinner following the G7 summit at the Palace of Versailles.

Iranian President Masoud Pezeshkian has also signed the agreement, according to US officials.

Although earlier statements suggested a formal ceremony in Geneva later in the week, it is unclear whether that event will still take place.

Under the fourth provision, the United States will start lifting its naval blockade and remove barriers affecting Iranian ports once the MoU is in effect.

The blockade is set to end entirely within 30 days. During this transitional period, US authorization for vessels entering Iranian ports will correspond to the restoration of shipping traffic through the Strait of Hormuz.

Within 30 days of concluding a final agreement, the US has pledged to withdraw forces positioned near Iran.

In practical terms, American military deployments will return to their pre-conflict configuration, as they were before hostilities began on 28 February.

The MoU further states that Iran will use its best efforts to guarantee free and secure passage for commercial ships through the Strait of Hormuz without imposing transit fees.

Reopening the strait has been a primary objective for Washington since its closure caused a surge in global oil prices.

Shipping activity is expected to resume immediately, subject to the removal of military and technical obstacles, including de-mining operations.

US officials stressed repeatedly that vessels will not face charges for passage through the waterway.

Over the longer term, Iran will collaborate with Oman and other Gulf nations to establish a broader framework for managing the Strait of Hormuz.

According to US officials, while Iran may assert its rights strongly, Gulf states would oppose any future system that imposes tolls on shipping.

The sixth section outlines plans for a reconstruction and development initiative valued at no less than $300bn, to be organized by the US and regional partners.

The detailed structure of this fund will be finalized within 60 days of reaching a comprehensive agreement, and the US will provide necessary licenses and approvals.

However, American officials clarified that the US is not required to directly finance the fund.

One official explained that Washington would not contribute financially but could authorize third countries to invest, provided Iran meets its obligations.

For example, if Iran complies with the agreement, foreign governments might invest in infrastructure projects in Iran with US approval.

The administration has underscored that no direct US payments will be made to Iran, contrasting the arrangement with the 2015 nuclear deal.

The agreement also calls for the removal of US economic sanctions on Iran, including measures enacted through United Nations Security Council resolutions and unilateral American actions.

However, the timeline for lifting sanctions has yet to be defined.

The schedule will be determined during negotiations on the final agreement, though both sides have expressed an intention to address sanctions relief promptly.

Sanctions have severely impacted Iran’s economy, particularly through efforts to restrict its access to global financial markets.

Iran has pledged not to pursue or develop nuclear weapons, and both countries have agreed to address Iran’s existing stockpile of enriched uranium.

The precise method for handling this material remains undecided. At minimum, it will be diluted under the supervision of the International Atomic Energy Agency, with further details to be negotiated.

A senior US official described this requirement as a significant achievement and a baseline condition.

Trump has stated that preventing Iran from acquiring a nuclear weapon was the primary objective of recent US actions.

Because the deal is performance-based, sanctions relief is contingent upon Iran adhering to its nuclear commitments.

Additional provisions establish a temporary “status quo” regarding Iran’s nuclear activities until the enriched uranium issue is resolved.

This means the US will refrain from imposing new sanctions and will issue waivers allowing oil exports and related financial and transportation services.

These waivers were previously a major obstacle in negotiations.

Iran had insisted on access to frozen assets as part of the talks, seeking economic relief.

The eleventh provision states that the US will make frozen or restricted funds accessible once the MoU is signed, with procedures to be finalized in ongoing negotiations.

Officials indicated that portions of these funds may be released incrementally as Iran demonstrates compliance, particularly regarding its enriched uranium stockpile.

The concluding sections outline the framework for implementation.

They call for the creation of a monitoring mechanism to oversee compliance with both the MoU and any eventual comprehensive agreement, though specific details have not yet been defined.

Following the MoU’s activation, formal negotiations toward a final settlement will begin.

Ultimately, any comprehensive agreement will be endorsed through a binding resolution of the United Nations Security Council.