The presidents of the United States (US) and Iran have signed an initial peace agreement aimed at ending the war, which takes effect immediately, the BBC reports.
The agreement includes the reopening of the Strait of Hormuz, a $300 billion plan to "rehabilitate" Iran, as well as the lifting of "all types of US sanctions" on Iran.
However, the issue of Iran's nuclear program, which the US has cited as the main reason for the conflict, will still be negotiated during an extendable 60-day period.
US President Donald Trump, who signed the agreement in France during the G7 summit, defended the proposal, saying it would prevent "economic catastrophe." However, he warned that the US would "bomb Iran hard" if a final deal was not reached.
Iranian President Masoud Pazakhstani also signed the document on Wednesday, Tehran confirmed.
Iranian parliament speaker and key negotiator Mohammad Bagher Ghalibaf told state media that he still did not trust the US and that Iran's "finger was on the trigger."
"If the enemy does not understand the language of logic, we will again act with the language of force," he told state-run Fars TV.
The US and Israel launched a war against Iran on February 28, killing the supreme leader, Ayatollah Ali Khamenei, and top military officials on the first day.
However, the conflict has since spread, sending energy prices soaring and renewing inflationary pressures, as Iran effectively closed the Strait of Hormuz, a key trade waterway through which about 20 percent of the world's oil and liquefied natural gas (LNG) usually passes.
Trump told reporters in France, at the lakeside resort of Evian-les-Bains, where the G7 summit was held, that the plan would prevent a "world depression."
"I didn't want to see an economic disaster. If this had continued, it could have happened. All I know is that every time we talked about the possibility of peace, the stock market went up like a rocket. Every time we said something negative, like, you know what, we're not going to be able to make a deal, it would go down," Trump told reporters.
Oil prices fell after the agreement was announced.
In morning trade in Asia, the price of Brent crude oil was down about one percent at $78,79 per barrel, but still about $8 higher than before the conflict began.
Trump signed a hard copy of the initial agreement, called a memorandum of understanding, during a state dinner hosted by French President Emmanuel Macron at the Palace of Versailles.
The text states that the US and Iran "commit to negotiating and reaching a final agreement within a maximum of 60 days, which may be extended by mutual consent."
The agreement states that "Iran reaffirms that it will not acquire or develop nuclear weapons," which has been Trump's number one condition since the start of the war.
The memorandum also states that Iran's enriched uranium will be "diluted" on site, under the auspices of the International Atomic Energy Agency (IAEA), the United Nations (UN) nuclear watchdog.
Originally, the US demanded that nuclear material be completely removed from the country.
However, the memorandum leaves open the possibility of future taxes. There were none before the conflict.
Iranian Parliament Speaker Ghalibaf said in an interview broadcast on state television that the Strait of Hormuz "will not return to the conditions that existed before the war."
He hinted that the country would charge ships to pass through the key passage after the 60-day period stipulated in the agreement expires.
Although Trump had previously promised to destroy Iran's ballistic missiles, at the G7 summit he said it would be "okay" for Tehran to have them "if other countries have them too."
The first point of the agreement declares "an immediate and permanent cessation of military operations on all fronts, including Lebanon."
However, Israel has said it has no plans to withdraw its troops from Lebanon, and on Wednesday it carried out attacks on Hezbollah.
Trump is increasingly concerned that Israeli military operations against Hezbollah could jeopardize the Iran deal. On Wednesday, he rebuked Israeli Prime Minister Benjamin Netanyahu at the G7 summit.
The US president said that Netanyahu is a "good man" but that he could use "a little softer approach."
"You don't have to tear down a building every time someone from Hezbollah walks in," Trump said.
After dinner in Versailles, Trump headed back to Washington, where his Iran peace plan has upset lawmakers from both parties - including members of his own political party.
Louisiana Republican Senator Bill Cassidy, who recently lost his reelection race to a Trump-backed opponent, said: "This is the worst foreign policy failure in decades."
Republican Senator from Texas Ted Cruz, one of the staunchest advocates of a tough approach to Iran in Congress, has questioned the $300 billion fund for Iran.
"Giving billions of dollars to theocratic fanatics who want to kill us is not a good idea. I think the president, unfortunately, is getting bad advice," Cruz told reporters.
Earlier on Wednesday, US officials held a media briefing, where they read the memorandum verbatim and denied that the US was obligated to pay Iran "a single cent of the money" under the $300 billion fund.
As a hypothetical example, one official said that if Iran "behaves properly," Emirati authorities could build a power plant in Iran, with the blessing of the US.
At the G7 summit, Trump said reports that the US would give Iran money from the fund were a "fake story."
"We don't give them money. We don't give them any of that," he said.
However, he also said that Iranian assets frozen during the war should be returned.
"It's not our money, it's their money, and we froze it. At some point, I guess we're going to have to give it back," Trump said.
He previously sharply criticized former US President Barack Obama for unfreezing $1,7 billion in Iranian assets, including interest, as part of the 2015 nuclear deal with that country. Trump scrapped the Obama-era agreement during his first term in the White House.
Democrats, meanwhile, were harsh in their assessment of Trump's plan.
New Hampshire Senator Jeanne Shaheen told the BBC that it was a "very bad agreement" and did not address issues such as Iran's support for regional proxy groups, such as the militant group Hezbollah, or its missile program.
"None of the goals that President Trump set at the beginning of the war have been achieved," she said.
See more:
Download the app and follow the news
FOLLOW US ON
