Trump Agrees to Two-Week Ceasefire, Iran Says Safe Passage Through Hormuz Possible

US and Iran agree to two-week ceasefire brokered by Pakistan

Overview of the US-Iran Ceasefire Agreement and Regional Implications

By Steve Holland, Parisa Hafezi and Alexander Cornwell

WASHINGTON/DUBAI/TEL AVIV, April 8 (Reuters) - The United States and Iran agreed to a two-week ceasefire brokered by Pakistan, potentially suspending a six-week-old war that has killed thousands, spread across the Middle East and caused unprecedented disruption to the world's energy supplies.

Announcement and Terms of the Ceasefire

Trump announced the agreement late on Tuesday, just two hours before a deadline he had set for Iran to open the blockaded Strait of Hormuz or face the destruction of its "whole civilisation".

Pakistani Prime Minister Shehbaz Sharif said he had invited Iranian and U.S. delegations to meet in Islamabad on Friday. The deal is subject to Iran's agreement to pause its blockade of oil and gas passing through the strait, Trump said.

Impact on Global Energy Markets

The waterway typically handles about one-fifth of global oil and liquefied natural gas shipments. News of the deal, and the prospect that the worst disruption to global energy markets in history could finally come to a close, caused a sharp fall in oil prices and a surge in share markets around the world. 

Iran's foreign minister, Abbas Araqchi, said in a statement Tehran would cease counter-attacks and provide safe passage through the waterway - if attacks against it stopped.

Iran's Ruling Establishment Survives

Crowds took to the streets of Iran overnight to celebrate, waving Iranian flags and burning flags of the United States and Israel. But there was also wariness that a deal would not hold.

Public Reaction in Iran

"Israel will not allow diplomacy to work and Trump might change his view tomorrow. But at least we can sleep tonight without strikes," Alireza, 29, a government employee in Tehran, told Reuters by phone.

Background of the Conflict

The ceasefire suspends the war launched on February 28 by Trump and Israeli Prime Minister Benjamin Netanyahu, who had said at the time that they sought to prevent Iran from projecting force beyond its borders, end its nuclear programme and create conditions for Iranians to topple their rulers.

Trump told the French news agency AFP that the ceasefire represented a "total and complete victory" and said on Truth Social that the U.S. had achieved its military objectives.

Iran's Capabilities and Regional Power Dynamics

But the war has yet to deprive Iran either of its stockpile of near-weapons-grade highly enriched uranium or its ability to hit its neighbours with missiles and drones. The clerical leadership, which faced a mass uprising months ago, withstood the superpower onslaught with no sign of domestic opposition.

And Tehran's proven ability to cut off Gulf energy supplies, despite the massive U.S. military presence built across the region over decades, could reshape the power dynamics of the Gulf for generations.

"The enemy, in its unjust, illegal and criminal war against the Iranian nation, has suffered an undeniable, historic and crushing defeat," Iran's Supreme National Security Council said in a statement.

Reactions from Israel

Netanyahu's office said Israel supported the decision to suspend strikes on Iran for two weeks. But the agreement is likely to be seen as a blow for the Israeli leader, who had repeatedly said he wanted Iran's rulers to fall.

"There has never been such a diplomatic disaster in all our history," opposition politician Yair Lapid said. "It will take us years to repair the diplomatic and strategic damage that Netanyahu caused due to arrogance, negligence and lack of strategic planning."

Yair Golan, a former military deputy chief of staff who plans to run in the next election, wrote on X that the outcome was a "complete failure that endangered Israel's security".

"The nuclear program was not destroyed. The ballistic threat remains. The regime is still intact and is even emerging from this war stronger," he said.

Israel's Attacks on Lebanon Continue

Shipping and Security Concerns

Reviving shipping from the Gulf could take time: shipping companies will need assurances of safety before sailing.

Container shipper Maersk said it was not yet making changes: "Any decision to transit the Strait of Hormuz will be based on continuous risk assessments, close monitoring of the security situation, and available guidance from relevant authorities and partners."

Ongoing Conflict in Lebanon

The agreement did not halt Israel's parallel campaign in Lebanon, which it invaded in March in pursuit of the Iran-aligned Hezbollah militia. Netanyahu's office said the ceasefire did not apply to Lebanon, apparently contradicting Sharif.

The Lebanese state news agency NNA reported continued Israeli strikes across southern Lebanon, including artillery shelling and a dawn air strike on a building near a hospital that killed four people. Israel's military issued repeated urgent warnings to residents that it planned to attack the city of Tyre in southern Lebanon.

A senior Lebanese official told Reuters that Lebanon had received no information on its inclusion in the ceasefire, and had not been involved in talks.

Unresolved Demands and Future Negotiations

The U.S.-Iranian truce leaves the main demands of the warring sides unresolved.

US and Israeli Conditions

An Israeli official said senior Trump administration officials had assured Israel that they would firmly insist, in talks over the next two weeks, on previous conditions such as the removal of Iran's nuclear material, a halt to enrichment and the elimination of ballistic missiles.

Iran's Potential Demands

But Iran could also make further demands. It has previously demanded the lifting of all sanctions, compensation for damage, guarantees that the war will not resume and a new system that would allow it to collect payment from ships that use the Strait of Hormuz.

Criticism of the Ceasefire

Hossein Shariatmadari, editor-in-chief of Kayhan, a newspaper closely associated with late supreme leader Ayatollah Ali Khamenei, derided the ceasefire in an editorial, saying "compromise and negotiation are a gift to the enemy".

(Reporting by Reuters bureaus worldwide; Writing by David Dolan and Peter