Middle East enters uneasy new phase

The guns may have fallen silent in the Gulf following the memorandum of understanding (MoU) between Iran and the United States, but any suggestion that peace has arrived in the Middle East would be premature. Beneath the ceasefire and diplomatic engagements lies a potentially explosive negotiation process with several contentious issues threatening to derail the calm. The past week illustrated the current situation's contradictions. The US carried out strikes against Iranian military positions after a commercial vessel came under attack in the Strait of Hormuz, with Washington accusing Tehran of violating understandings reached after the ceasefire.

US Vice President JD Vance warned that "violence will be met with violence," while simultaneously urging Iran to continue diplomatic engagement. Iran accused Washington of breaching the ceasefire and warned that any major or minor violation would be met with force. The exchange essentially captured the current Middle East reality: simultaneous de-escalation and confrontation. Despite military action and rhetoric, Washington and Tehran have established a direct hotline to prevent unintended escalation. More significantly, officials from Iran's Revolutionary Guards and the US military are expected to meet in Doha soon to discuss mechanisms aimed at avoiding future conflict. For two adversaries that have largely communicated through threats and proxies for decades, such direct engagement represents a remarkable shift.

Yet diplomacy faces formidable obstacles.

Perhaps the most immediate challenge is the future of the Strait of Hormuz. Iran appears to believe that the post-war environment has enhanced its leverage over the Strait and wants a greater say in future security arrangements. It argues that its resilience in conflict has altered the regional balance and warrants a bigger maritime security role. The Gulf Arab states, however, disagree. For the Gulf Cooperation Council (GCC), as well as the US and Europe, the objective remains restoring the Strait of Hormuz to its pre-war status - ensuring free navigation, unrestricted commercial shipping and preventing new security architecture that gives Iran additional leverage. The seemingly technical disagreement could become one of the biggest obstacles facing the diplomatic process. Nearly one-fifth of global oil supplies pass through the Strait; even limited disruptions can raise energy prices and rattle international markets. That explains why Gulf countries have become deeply invested in deterring another crisis. US Secretary of State Marco Rubio recently travelled to the Gulf to consult regional leaders, conveying that maritime security and freedom of navigation remain non-negotiable priorities.

Concurrently, another important diplomatic development took place when the foreign ministers of the United Arab Emirates and Iran held a rare high-level telephone conversation, whose significance should not be underestimated.

At various stages of the crisis, some Gulf countries had quietly favoured a tougher military approach toward Iran. Their priorities, however, have now shifted towards stability, trade and investment. Another major challenge lies in Lebanon. A trilateral understanding involving Lebanon, Israel and the US is taking shape, but key details remain contentious. It links an Israeli withdrawal from southern Lebanon to Hezbollah's complete disarmament. Yet "complete disarmament" remains open to interpretation and could become a major source of disagreement. Differences also persist over the implementation of the Iran-US MoU, particularly regarding Iran's frozen assets. Washington wants any released funds to be tightly monitored and largely used for humanitarian and agricultural purchases, while Tehran insists they are sovereign Iranian funds and should be unrestricted.

These disputes are expected to dominate the next round of negotiations. The guns may have gone silent in the Middle East, yet the negotiations that will shape the region's future security architecture are only beginning.