Bigger than Iran-US deal

Last week, a development many considered impossible just months ago became reality. After months of war, covert diplomacy, military escalation and intense backchannel talks, Iran and the United States signed what is now being called the Islamabad Memorandum of Understanding.

The 14-point agreement is not a final peace treaty, but an interim arrangement meant to end hostilities and open a path towards a broader Middle East settlement. It commits both sides to an immediate halt in military confrontation, lays out a framework for sanctions relief, sets up a verification mechanism for Iran's nuclear activities and creates direct communication channels between Washington and Tehran. Notably, it also aims to end the conflict involving Lebanon and launch a broader regional dialogue.

What surprised many observers was how much the agreement appeared to favour Iran. For years, US administrations had demanded Tehran dismantle much of its nuclear infrastructure and curb its regional influence before receiving meaningful sanctions relief. Critics in Washington and Tel Aviv argue that President Trump accepted terms that would have been unthinkable before the war. His administration counters that Iran will never get a nuclear weapon and that the deal is already calming markets and easing energy prices.

But even before the ink dried, obstacles emerged. Follow-up talks set for Switzerland were delayed after Iran refused to send a delegation while Israeli operations in Lebanon continued. Tehran argued that diplomacy couldn't proceed with a major front of the conflict still active.

Yet the biggest threat to the memorandum may not come from Tehran or Beirut, but from Washington.

Trump is facing growing political backlash over the deal. Several cabinet ministers have attacked the deal as abandoning long-standing Israeli security concerns. The criticism became so intense that Vice President JD Vance issued an unusually strong public warning to Israeli leaders against undermining a diplomatic process that Washington sees as essential to regional stability.

And that brings us to what may be the biggest story emerging from this entire episode: growing tensions between the US and Israel. Since Israel's founding in 1948, Washington has been its chief diplomatic, military and economic supporter, even through disputes over settlements, peace talks or military operations.

Now, an agreement with Iran is testing that relationship in ways rarely seen before. Israeli leaders have long viewed Iran as the most serious strategic threat to their country's security. Successive governments argued that sustained pressure, rather than negotiation, offered the best path forward.

The Trump administration has clearly concluded otherwise. After months of conflict and escalating costs, Washington seems to have decided that diplomatic engagement with Iran is necessary to stabilise the region and protect broader American interests. That divergence is creating tensions unlike anything seen during President Trump's political career.

So where does all this lead? Can the Islamabad Memorandum become a lasting accord?

Much depends on good-faith implementation, progress on Lebanon and other regional flashpoints and whether domestic opposition in both Iran and the US can be managed.

History suggests caution. Previous efforts at reconciliation between Iran and the US have often collapsed under the weight of mistrust and political opposition. Yet transformative agreements frequently begin as fragile interim arrangements.

For now, the Islamabad Memorandum has achieved something few thought possible. It has stopped a war, opened a diplomatic channel between bitter adversaries and reshaped the political conversation across the Middle East. Whether it becomes a lasting peace or merely a pause before another crisis is unclear. What is clear, however, is that it has exposed new fault lines in one of the world's most important alliances - the relationship between the US and Israel. And that story may ultimately prove even more consequential than the deal itself.