The United States  (U.S) and Iran have formally agreed to end their four-month armed conflict through a Memorandum of Understanding (MoU) brokered with the support of Pakistan.

The breakthrough was announced by Shehbaz Shari, Pakistan’s Prime Minister, who said the agreement—referred to as the “Islamabad Memorandum of Understanding”—was signed electronically by the leadership of both countries and endorsed through his mediation role.

Under the terms of the initial framework, Iran is expected to immediately reopen the Strait of Hormuz, a key global oil shipping route, while the United States will lift its naval blockade on Iranian ports as part of early de-escalation measures.

The agreement was reportedly finalized after signatures were exchanged digitally between the parties, following engagements involving U.S. President Donald Trump and Iranian officials.

A major component of the deal includes the establishment of a $300 billion support fund for Iran, alongside the release of frozen assets and easing of sanctions.

However, more complex issues—particularly Iran’s nuclear programme, enriched uranium stockpiles, and regional security concerns—were not resolved in the initial agreement and have been pushed to a structured 60-day technical negotiation phase.

Further discussions will focus on verification mechanisms, nuclear oversight, and broader security guarantees, with Pakistan and Qatar continuing their mediation roles.

Prime Minister Sharif described the development as a significant diplomatic breakthrough and credited multiple regional and international actors for supporting the peace process.

The conflict, which began in late February following coordinated military strikes, had continued intermittently despite a ceasefire attempt earlier in April before the latest agreement brought formal closure to active hostilities.

Further discussions will focus on verification mechanisms, nuclear oversight, and broader security guarantees, with Pakistan and Qatar continuing their mediation roles.

Prime Minister Sharif described the development as a significant diplomatic breakthrough and credited multiple regional and international actors for supporting the peace process.

The conflict, which began in late February following coordinated military strikes, had continued intermittently despite a ceasefire attempt earlier in April before the latest agreement brought formal closure to active hostilities.

Ethiopian jets bombed the Tigray region and Prime Minister Abiy Ahmed pledged more air strikes in the escalating conflict amid reports that Tigrayan forces had seized control of federal military sites and weapons.

Civilians in the northern region should avoid “collateral damage” by not gathering outside as strikes would continue, Abiy said defying international pleas for both sides to show restraint.

The developments illustrate how quickly the days-old conflict is escalating, raising the threat of a civil war that experts and diplomats warn would destabilise the country of 110 million people and hurt the broader Horn of Africa.

A simmering row between Abiy’s federal government and his former Tigrayan allies exploded on Wednesday after Abiy ordered a military campaign. Abiy, who won last year’s Nobel Peace Prize, accused the Tigray People’s Liberation Front (TPLF), of attacking a federal military base and trying to steal equipment. He said “the last red line” had been crossed.

In a step to further deny legitimacy to Tigray’s regional government elected in September against the federal government’s advise, Ethiopia’s federal parliament on Saturday approved the formation of an interim government for the region.

“A decision has been passed to remove the current executive body and council of (Tigray) region,” Ethiopia’s House of Federation said in a statement on its Facebook page.

The government cut phone and internet communications to the region, according to the digital rights group Access Now, making it impossible to verify official accounts. The government accused the TPLF of shutting down communications.

Diplomats, regional security officers and aid workers said that fighting is spreading in the northwestern part of the country, along Tigray’s border with the Amhara region, which is backing the federal government, and near the border with Sudan and Eritrea.

Abiy said on Friday that government troops had seized control of the town of Dansha, near the border area, from the TPLF.

Risks

After toppling a Marxist dictator in 1991, the TPLF led the country’s multi-ethnic ruling coalition until Abiy took office in 2018. For those decades, Tigrayans dominated the military.

Abiy, who is from the Oromo ethnic group, Ethiopia’s largest, has sacked many senior generals as part of a crackdown on past rights abuses and corruption which Tigrayans complain unfairly targets them.

Tigrayan forces are battle-hardened and possess significant stocks of military hardware, experts say. Their regional troops and associated militias number up to 250,000 men, according to the International Crisis Group think tank.

One of the biggest risks is that the Ethiopian army will splinter along ethnic lines, with Tigrayans defecting to the regional force. There are indications that is already happening, reports said.

Tigrayan forces were in control of the federal military’s Northern Command headquarters in the city of Mekelle, according to a United Nations internal security report.

The Northern Command is one of Ethiopia’s four military commands and controls the border with Sudan, Djibouti and Eritrea.

Tigrayan forces have seized “heavy weapons” from several of the command’s depots, the report read.

It said that the command is the most heavily armed and contains “most of the military’s heavy weapons including the majority of the country’s mechanised and armoured units, artillery and air assets.”

The government is mobilising troops from around the country and sending them to Tigray, risking a security vacuum in other parts of the country where ethnic violence is raging.

More than 50 people were killed by gunmen from a rival ethnic group in western Ethiopia recently, reports said.

Troop redeployments from near the border with Somalia will make that area “more vulnerable to possible incursions by Al Shabaab,” the al Qaeda-linked insurgency trying to overthrow the government in Somalia, according to the U.N. internal security report.