The United States and Iran continue to stumble through talks over phase 2 of their memorandum of understanding (MOU), presenting different versions of what they agreed on. But could it be that the basic deal so far might endure because the alternative—a return to war—is awful for all sides?

On the latest episode of FP Live, I spoke with Ali Vaez, the Iran project director at the International Crisis Group, an international body that seeks to bridge differences in global peace talks. Vaez thinks a “strong nuclear deal” is still possible, since Iran is today in a very different place than it was during the 2015 nuclear talks under the Obama administration.

The United States and Iran continue to stumble through talks over phase 2 of their memorandum of understanding (MOU), presenting different versions of what they agreed on. But could it be that the basic deal so far might endure because the alternative—a return to war—is awful for all sides?

On the latest episode of FP Live, I spoke with Ali Vaez, the Iran project director at the International Crisis Group, an international body that seeks to bridge differences in global peace talks. Vaez thinks a “strong nuclear deal” is still possible, since Iran is today in a very different place than it was during the 2015 nuclear talks under the Obama administration.

Subscribers can watch the full discussion on the video box atop this page, or follow the free FP Live podcast, on which I also offer my own read on the last week’s news. What follows here is a condensed and lightly edited transcript.

Ravi Agrawal: Both Tehran and the White House are spinning the MOU as a win. Who has the better argument?

Ali Vaez: I’ve lived through this in the past—a very similar situation when we had the Joint Comprehensive Plan of Action [JCPOA], the 2015 nuclear deal. The reality is that the imperatives of domestic politics in Tehran and Washington are completely incompatible. Whatever you say to score a point at home is going to burn the other side by definition, and then they will try to counter that narrative in a way that would create troubles for you at home. This is inevitable. It is 47 years of animosity that is institutionalized in both capitals, and there is no going around it.

Having said this, the Trump administration had set the bar very high in terms of what success really means. At some point, [U.S.] President [Donald] Trump required unconditional surrender. This MOU is not that. It is a much more of an equal-footing kind of agreement. For Iran, a much weaker conventional military power, which has survived in this confrontation with the strongest military and the mightiest intelligence organization in the world—the United States and Israel, respectively—that is quite an achievement. But at the end of the day, the MOU strikes the right balance, and it’s a mistake to look at it as having winners and losers. The most important lesson is that wars of choice often end in grief, especially in cases where we aggrandize the threat and underestimate the risks in pursuing a military solution to a complicated problem.

RA: I want to dig deeper on the financial benefits for Tehran in this MOU. So there’s some sanctions relief, there’s several billion dollars in frozen funds that could get released. And then there’s as much as $300 billion in potential economic aid, although it’s unclear who exactly is funding those pots. Talk a bit about each of those and how important they are to Iran.

AV: The $300 billion is really pie in the sky, and it’s in phase 2 of the agreement—which we can discuss if we ever get into phase 2. But in phase 1, there are two specific economic benefits for Iran. One is access to some of its frozen assets. The Trump administration says it’s $6 billion now and $6 billion more as the Strait of Hormuz reopens and traffic goes back to prewar levels. The Iranian argument is that it’s........

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