WASHINGTON/ISLAMABAD/NABATIEH (Reuters) – U.S. President Donald Trump expressed confidence that an agreement could soon be reached to end the Iran war and said Tehran-backed Hezbollah should support a 10-day U.S.-backed truce agreed between Lebanon and Israel.
Trump said an extension of a two-week ceasefire with Iran was possible, but may not be needed.
“We’re going to see what happens. But I think we’re very close to making a deal with Iran,” he told reporters, adding if an agreement was reached and signed in the Pakistani capital Islamabad, he may go there for the occasion.
The U.S.-Israeli attack on Iran that started on February 28 has killed thousands of people and has been unpopular in the United States, leaving Trump with a political headache just months before crucial midterm elections at home.
The war triggered the worst oil price shock in history, with the International Monetary Fund downgrading its outlook for the global economy and warning prolonged conflict could push it to the brink of recession.
Group of Seven finance chiefs on Thursday said there was a pressing need for lasting peace to limit the economic costs.
A Pakistani source involved in mediating between the U.S. and Iran said on Friday there was progress in backdoor diplomacy and that an upcoming meeting between the two sides could result in the signing of a memorandum of understanding followed by a comprehensive deal within 60 days.
“Both sides are agreeing in principle. And technical bits come later,” the source said on condition of anonymity.
A diplomatic source said the key Pakistani mediator, army chief Field Marshal Asim Munir, had been holding talks in Tehran since Wednesday and had made a breakthrough on “sticky issues”.
Those had included Tehran’s nuclear ambitions, with the U.S. proposing at last weekend’s talks a 20-year suspension of all Iranian nuclear activity. Tehran suggested a halt of three to five years, according to people familiar with the proposals.
Iran has demanded international sanctions be lifted and Washington has pressed for any highly enriched uranium to be removed from Iran. Two Iranian sources have said there were signs of a compromise on the HEU stockpile, with Tehran considering shipping part of it out of the country.
Oil prices fell on Friday and Asian stocks headed for a second week of strong gains on optimism the Middle East conflict could be nearing an end, even though the critical Strait of Hormuz, an artery for a fifth of the world’s oil and gas supply, remains effectively closed.
The MSCI’s broadest index of Asia-Pacific shares outside Japan was down 0.8% as investors locked in profits after a blistering rally this month, with the index close to its highest since the Iran war broke out and almost all stock markets back to pre-war levels.
Brent crude futures declined to $98.53 a barrel at 0728 GMT while U.S. West Texas Intermediate crude futures fell to $93.59 a barrel, trimming gains from the previous session.
France and Britain will chair a meeting on Friday of around 40 countries aimed at signalling to the United States that some of its closest allies, many chided by Trump for failing to act, are ready to help restore freedom of navigation in the Strait of Hormuz once conditions allow.
