On 18 June, President Donald Trump publicly called for a complete ceasefire across all Middle Eastern fronts, explicitly naming Lebanon, Hezbollah, and Israel. The statement came hours after Washington and Tehran signed a memorandum of understanding (MoU) that commits both sides to an immediate and permanent halt to military operations, the reopening of the Strait of Hormuz, and the start of 60-day talks on a final accord. The MoU was signed remotely, with Trump at Versailles and President Massoud Pezeshkian in Iran, and is viewed in Western capitals as a framework that shifts the four-month US-Iran conflict from a military to a diplomatic phase.

From Washington, the administration presented the MoU as a peace commitment. Vice President J.D. Vance urged both Hezbollah and Israel to exercise restraint, stating that Hezbollah must cease rocket and drone attacks and that Israel should not escalate its operations in Lebanon. In Tehran, the foreign ministry confirmed the 14-point document and emphasised the obligation to restore shipping through Hormuz. Israel, which did not participate in the talks, has continued air and ground operations in southern Lebanon. Prime Minister Benjamin Netanyahu declared that Israeli forces would remain in a security zone there as long as security needs require it, while a senior Israeli official described ongoing negotiations with the Trump administration over the limits of the IDF's deployment, reportedly up to 10 kilometres inside Lebanese territory.

The announcement triggered immediate financial effects. Global oil prices fell sharply and equity indices rose, with Asian markets having already surged on 15 June after Trump's initial claim of a deal. The Strait of Hormuz, a critical chokepoint for global oil transit, began to see a resumption of traffic as the US suspended restrictions on vessels calling at Iranian ports. Yet the diplomatic progress remains fragile: Israeli strikes on Lebanon continued on 18 June, and Iranian military sources had earlier threatened a harsh response to what they termed 84 Israeli violations of a tentative truce in the preceding two days.

The MoU is the product of indirect negotiations that began in April 2025, mediated by Pakistan and Oman, and repeatedly interrupted by escalations including strikes on Iranian nuclear sites. The text is a declaration of intent, not a final settlement. Fundamental disputes persist, notably over the scope of Iran's uranium enrichment and access to frozen assets, as well as divergent interpretations of the Lebanon clause. Iran insists on a full cessation of hostilities, while Israel, with US backing, reserves the right to retaliate against Hezbollah. Analysts in European capitals note that the 60-day clock, which started on 18 June, sets a deadline of 17 August for a comprehensive agreement, leaving a narrow window to bridge gaps that have defied resolution for over a year.