U.S.-Iran deal to end war "now in place": Pakistani PM

The U.S. and Iran declared an end to hostilities on Sunday, Pakistani Prime Minister Shehbaz Sharif announced, with an official signing ceremony expected on Friday and more detailed nuclear negotiations to follow.

• Iran and the U.S. have not yet confirmed the news that the deal is now "in place," as Sharif wrote.

Why it matters: The deal is expected to extend the ceasefire by 60 days, reopen the Strait of Hormuz and launch nuclear talks after 107 days of war.

• If confirmed, the memorandum of understanding will mark the biggest diplomatic breakthrough of the war and buy time to settle the hardest questions over Iran's nuclear program.
• The agreement was expected to be signed electronically on Sunday after mediation by Pakistan and Qatar. Sharif said the formal ceremony would be Friday in Switzerland.

The big picture: If it holds, the deal could ease the global energy shock the war set off. The agreement is designed to restore shipping through the Strait of Hormuz, which before the war handled about 20% of global oil and liquefied natural gas. But it leaves key nuclear issues to be negotiated over the next two months.

• Reopening the whole strait may not be immediate in practice. Mine-clearing, repairing infrastructure and guaranteeing security could take time before a full return to pre-war shipping volumes.

Breaking it down: The agreement calls for the U.S. and Iran to negotiate over Iran's nuclear enrichment and the disposal of its highly enriched uranium during the 60-day window.

• The U.S. will commit to discuss sanctions relief and the release of frozen Iranian funds, with relief expected to be tied to Iran's compliance.
• The ceasefire includes fighting between Israel and Hezbollah in Lebanon, which flared up again on Sunday.

State of play: The apparent agreement comes after a volatile final stretch. Israel struck Hezbollah targets in Beirut hours before the expected signing, prompting Iranian threats to walk away from the deal.

What's next: The sides have given themselves 60 days to reach a technical agreement on how to downblend Iran's highly enriched uranium and both freeze and monitor Iran's nuclear program going forward.

• That's a tall order given how difficult it was to reach the much less detailed memorandum of understanding.
• The U.S. side insists Iran is incentivized to reach a final agreement because sanctions relief and access to frozen funds depend on progress on the nuclear front.
• Some hawks in the U.S. and Israel worry there will never be a final deal and the war will end with the nuclear questions unresolved.