The Pulse | Diplomacy | South Asia

What Will the End of the Iran-US War Mean for Pakistan?

Pakistanis are hoping that their role in providing Trump with an offramp to end the war will lead to investment flows.

Pakistan Prime Minister Shehbaz Sharif signs the Islamabad Memorandum of Understanding as guarantor after US President Donald Trump and Iran’s President Masoud Pezeshkian sign the document electronically, Islamabad, Pakistan, June 18, 2026.

On June 17, the United States and Iran signed electronically a Memorandum of Understanding (MoU) aimed at permanently ending the war between the two countries and on other fronts, including Lebanon and, by extension, Israel. The document was signed by U.S. President Donald Trump and Iranian President Masoud Pezeshkian, as well as Pakistan’s Prime Minister, Shehbaz Sharif.

Sharif called the agreement the “Islamabad Memorandum of Understanding,” which he said he “endorsed” as the “mediator.”

However, hours after the digital signing of this accord, trouble erupted as talks that were scheduled to take place in Switzerland between the U..S and Iran on Friday to implement the peace deal were abruptly cancelled. While such disruptions are inevitable and are, in fact, to be expected in a complex peace process, they serve as a stark reminder that true stability is a long way off and immense challenges lie ahead.

The cancellation of the talks came after Israel accused Hezbollah of killing four Israeli soldiers. A wave of Israeli airstrikes on southern Lebanon followed, killing at least 18 people.

The technical talks were scheduled to begin in the Swiss village of Obbürgen just two days after the MoU was signed. The document is meant to open a crucial 60-day window to negotiate a permanent agreement over Iran’s nuclear program and restore oil traffic through the Strait of Hormuz.

The fragility of the process was made clear by the White House, which stated that it looked forward to “beginning technical talks as soon as possible” while simultaneously announcing that Vice President J.D. Vance, who is leading negotiations on behalf of the Trump administration, would no longer be traveling to Switzerland.

“The logistics of these negotiations have never been simple or predictable. As of now, the vice president is not departing tonight,” a White House spokesperson remarked late on Thursday.

Nevertheless, the signing of the MoU marks the culmination of remarkable efforts by Pakistan and other countries, including Qatar, Saudi Arabia, and Turkiye, to seal a deal between Iran and the U.S. after more than three months of war. Pakistan’s important role in keeping the dialogue between Iran and the U.S open has been widely recognized. Pakistan’s policymakers have every reason to congratulate themselves for this unprecedented achievement.

While implementation talks are clearly only at an early and highly volatile stage, Pakistan will hope that these hurdles can eventually be overcome. If the peace process can be sustained, the fundamental question for Islamabad remains: what does a successful long-term deal mean for Pakistan’s future, its development, and its ties with Iran and the U.S.?

As the war in West Asia winds down, Iran appears strategically well-positioned.

The MoU bolsters Iran’s position in several key ways. The U.S. and regional partners have committed to set up a $300 billion reconstruction fund for Iran. Ballistic missiles have been removed from central discussions. It allows Iran to downblend enriched uranium on sites within Iran under IAEA supervision. It permits Iran to sell oil freely, lifts all sorts of sanctions, and ends the war on all fronts, including Lebanon.

The U.S. and Israel carried out a range of highly lethal attacks against Iran but the latter not only absorbed these attacks but also survived. The government in Tehran has managed to keep cities and towns functioning. Despite the elimination of top leaders and officials in key institutions, Iran’s governance structure remains intact. Iran also retained control over the Strait of Hormuz, and forced the U.S. to opt for a settlement on terms that were unacceptable to Washington just a few weeks ago.

At the start of the U.S.-Israel war on Iran, Trump stated that any deal with Iran must result in the country’s “unconditional surrender,” setting maximalist war objectives for the United States. “After that, and the selection of a GREAT & ACCEPTABLE Leader(s), we, and many of our wonderful and very brave allies and partners, will work tirelessly to bring Iran back from the brink of destruction, making it economically bigger, better, and stronger than ever before,” the U.S. president wrote on his Truth Social platform.

Iran’s absorption of the U.S. and Israel’s bombing and its emergence with its state structure intact and in control is no small victory, especially since its economy has been reeling from years of U.S. sanctions.

Analysts have pointed out that the U.S. “went to war triumphant and will likely leave greatly weakened.” “President Trump lost,” Jonathan........

© The Diplomat