Deal would open Hormuz, but the toughest issues remain unresolved

As the stalemate over the frozen war with Iran threatens a global economic collapse, Washington and Tehran have scaled back ambitions to reach a comprehensive peace deal and are now seeking to agree on a limited pact that would put the more difficult issues on hold.

Reuters offers an overview of the proposals being discussed and the issues that still remain unresolved after the war:

What stage are the talks at?

Sources from both camps said the latest peace efforts are focused on an interim memorandum of understanding that would halt the war and allow traffic through the Strait of Hormuz while a broader agreement is discussed.

The proposed framework would unfold in three phases: a formal end to the war, a resolution to the crisis in the Strait of Hormuz, and the opening of a 30-day period for negotiations on a broader agreement.

Sources said differences persist even over this limited plan. Any broader agreement would have to address intractable disputes, such as Iran's nuclear program. The last nuclear deal - reached in 2015 and abandoned by Trump in 2018 - required years of negotiations by large teams of technical experts.

Main topics

The end of the war - US President Donald Trump says the war is nearing an end and can be resolved by Iran accepting terms. Iran distrusts him and Israeli Prime Minister Benjamin Netanyahu. Iranian officials point to the decision to attack in February, despite a ceasefire that ended a previous US-Israeli air campaign last year. Both conflicts were launched without warning, at a time when efforts to resolve the issues through diplomacy were underway. Tehran also cites Israeli attacks during ceasefires in Gaza and Lebanon as reasons to believe the truce will not hold, and is seeking some kind of external guarantee.

Hormuz and the Gulf blockade - Tehran sees its control of the Strait of Hormuz, and Washington's blockade of Iranian ports, as the main levers of pressure. However, both sides suffer the consequences. Iran's economy is facing a catastrophe, and the inability to export oil could lead to storage problems and reduced production. At the same time, Iran's blockade of the Strait of Hormuz is causing a global energy crisis a few months before the US congressional elections. Iran wants formal recognition of its control over Hormuz, which the international community would oppose.

Nuclear program - The United States believes Iran wants to build a nuclear bomb. Iran denies this, saying its atomic program is for civilian purposes only. Washington wants Iran to give up its right to enrich uranium for 20 years and hand over its stockpile of highly enriched uranium. Iran wants its right to enrich to be recognized. An agreement could eventually be possible with a multi-year moratorium on enrichment and the export of highly enriched uranium, but that still seems unlikely.

Ballistic missiles - One of the main US demands before the war was that Iran limit the range of its ballistic missiles so that they could not reach Israel. Washington claims that the war has succeeded in weakening Iran's missile stockpile, and it is not clear whether it would continue to insist on range limitations in a broader peace agreement. Iran has always refused to discuss its ballistic missiles, arguing that its right to conventional weapons is not negotiable and that it still has a large arsenal.

Sanctions and frozen assets - Iran's economy has been battered by years of sanctions, which contributed to unrest across the country in January. Tehran desperately needs the sanctions lifted and frozen assets released. It is also seeking reparations for war damage, although the US does not seem likely to agree to that at this time, and it is not clear whether Iran would stick to that demand as a condition of a deal.

Iran has previously said that Israel's war against its ally Hezbollah in Lebanon must be included in any peace deal. Israel rejects this, and it is unclear how much Iran would insist on this in future talks.

What do Israel and the Gulf states think?

Israel is not directly involved in the peace effort. Netanyahu was eager to continue the war, and would also be reluctant to allow Israel's campaign against Hezbollah to be the subject of an agreement between Washington and Tehran.

The Gulf states are not united on how to end the conflict. They were targeted by Iran during the war and would oppose a deal that would allow Tehran to continue attacking them or to impose control over the Strait of Hormuz, their main trade route. They may fear that Washington will not prioritize their needs and concerns in the negotiations.

Could European countries, China or Russia have a role?

European countries have their own sanctions against Iran and would like to be included in any agreement aimed at resolving the nuclear dispute. France, Germany and Britain were closely involved in the 2015 agreement. European countries have offered to take a role in ensuring free passage through the Strait of Hormuz after the war.

China is a major buyer of Gulf oil that passes through the Strait of Hormuz. Iran may be hoping that Beijing would agree to act as a guarantor in a potential deal, but China has given no indication that it would seek such a role.

Iran may also want Russia to play a role in a potential deal on its highly enriched uranium stockpile, although it is unclear whether Washington would accept that.