After 156 days of war and one Memorandum of Understanding between Iran and U.S., President Donald Trump on Sunday (August 2, 2026) said the American forces have called off military strikes against Iran on the request of Gulf allies. Mr. Trump announced the development, referring to his allies Qatar, Saudi Arabia and the United Arab Emirates.

Mr. Trump told the U.S. forces had plans in place to carry out the “biggest attack since World War II”. However, he has set the plan aside and give diplomacy a fair chance on the request of key Gulf leaders, including Saudi Crown Prince Mohammed bin Salman and other Iranian officials. “I said to the Crown Prince, ‘What would you rather do? Would you rather us do this or not?’ Mr. Trump told reporters on Air Force One as he flew back to Washington after spending the weekend at his golf club in Bedminster, New Jersey. “They said we would much prefer a deal as opposed to an attack, because you don’t know where these attacks lead.”

In a sharp rebuttal, the Iranian news agency Mehr, citing Iranian military officials, said the allegation “was nothing but a new lie”.

The announcement of a fresh round of talks between U.S. and Iran has leased a fresh hope in the global order, with expectation for an immediate ceasefire soon. The agreement arrives a little more than a month after Iran and U.S. signed a memorandum of understanding (MoU) to end the war.

Here are the key developments essential to understanding why the upcoming round of talks between Iran and U.S. officials is important.

The Lebanon issue

The military hostility in Lebanon, especially southern Lebanon, did not see any restraint owing to the nature of June 15 agreement between U.S. and Iran. Typically a Hezbollah stronghold, Israel captures parts of Southern Lebanon, triggering regular instances of military strike in the area. The equation is complex since Iran maintains a close relationship with Hezbollah, a Lebanese Shia militia-cum-political party.

In the past, Israel Prime Minister Benjamin Netanyahu and Defence Minister Israel Katz have said Israel will not retreat its forces from the region. Significantly, the ceasefire talks between Iran and Israel have been called off on multiple instances owing to Israel’s military aggression.

Strait of Hormuz factor

The biggest immediate stake is the Strait of Hormuz, through which roughly a fifth of the world’s oil trade normally passes. Disruptions in the waterway have rattled global energy markets, pushed up freight costs and fuelled inflation fears. Any agreement that restores normal shipping could ease pressure on oil prices and improve global economic confidence. Even though, Iran has claimed the waterway if off-limits due to ongoing military tension. However, the U.S. has claimed the closure claims to be false. The flashpoint has triggered a disruption in global supply of essential goods and increasing prices on it.

Rising crude oil price

The continue rise in oil prices had disrupted the economy of major nations. Higher crude costs increase the price of petrol, diesel and aviation fuel, raise transportation and manufacturing expenses, and feed into inflation across economies. For oil-importing countries such as India, which meets more than 85% of its crude oil requirement through imports, expensive oil widens the import bill, puts pressure on the rupee, increases the current account deficit and complicates fiscal management. Central banks may also find it harder to contain inflation, potentially delaying interest-rate cuts and slowing economic growth.

Equity benchmark indices Sensex and Nifty fell sharply by over 2% during the fag-end of the trade on Wednesday (July 8, 2026) amid reports that the U.S. President Donald Trump said the interim agreement with Iran is over, leading to a sharp rally in crude oil prices.

The 30-share BSE Sensex tanked 1,722.99 points, or 2.20%, to 76,457.73 in intraday trade. The 50-share NSE Nifty tumbled 530.05 points, or 2.17%, to 23,868.65.

All the 30-Sensex firms were trading in the red. InterGlobe Aviation, Maruti, Hindustan Unilever, UltraTech Cement, Bajaj Finance and Mahindra & Mahindra were major laggards.

Brent crude, the global oil benchmark, jumped 6.19% higher at $78.75 per barrel.

U.S. President Donald Trump on Wednesday (July 8, 2026) said the interim agreement with Iran was “over” but he would allow talks to continue. That raised concerns that the wider conflict in the Middle East could resume — and oil prices shot up.

In Asian markets, South Korea’s Kospi tumbled 5.35%, Japan’s Nikkei 225 index declined 2.11%, and Shanghai’s SSE Composite index dipped 0.49%. Hong Kong’s Hang Seng index jumped 2.99%.

West Asia War updates on July 8, 2026

U.S. markets ended lower on Tuesday (July 7, 2026).

Foreign Institutional Investors (FIIs) bought equities worth ₹393.19 crore on Tuesday (July 7, 2026), according to exchange data.

On Tuesday (July 7, 2026), fag-end selling dragged the Sensex lower, leading the benchmark to settle 104.35 points, or 0.13%, down at 78,180.72. The Nifty dipped 31.65 points, or 0.13%, to end at 24,398.70.

The U.S. struck Iran on Friday (June 26, 2026) in response to a drone attack a day earlier on a cargo ship in the Strait of Hormuz. It’s the most significant test yet to an interim understanding reached a week ago by the two countries to begin working to end their months-long war and reopen the pivotal waterway.

U.S. President Donald Trump said the drone attack violated the ceasefire. The strikes came shortly after Mr. Trump told reporters, “You’ll find out,” whether the U.S. would respond.

U.S. Central Command said the military struck missile and drone locations and coastal radar sites in Iran.

“I don’t like the fact that they took a shot yesterday, actually four of them,” Mr. Trump said at the White House shortly before the U.S. struck back. When asked why there would be strikes when Mr. Trump has insisted talks with Tehran are going well, Mr. Trump said of Iran, “They’re a little bit different.” He then abruptly cut off questions and reporters were ushered out of his office.

Ebrahim Azizi, who heads the Iranian parliament’s national security commission, responded to Mr. Trump on social media earlier Friday, saying, “The Strait of Hormuz is governed by Iran, so: Respect the rules” and to “not mistake control for escalation.” “This is not a violation of the ceasefire; it is ceasefire management,” Mr. Azizi wrote.

Strikes conclude an hour later

 The U.S. strikes on Iran concluded about an hour after U.S. Central Command announced the military action on social media, a U.S. official with knowledge of the situation told The Associated Press. The official spoke on condition of anonymity to discuss an ongoing military operation.

The British military said on Thursday (June 25, 2026) that a container ship was hit by a projectile off the coast of Oman, coming hours after Iran threatened vessels to stop using the route. The United Kingdom Maritime Trade Operations centre said no injuries were reported.

The development came during a fragile time for the U.S. and Iran as they work to negotiate a permanent end to the war. Iran has increasingly challenged the region and the U.S. over its control of the Strait of Hormuz, even with the current interim deal it reached with the U.S. last week.

The attack on the cargo ship happened while a United Nations maritime agency was beginning an operation to move stranded ships out of the strait this week, using an alternative route, hugging the shores of Oman rather than sailing through the central part of the strait.

The International Maritime Organisation halted the evacuations after the attack and said on Friday (June 26, 2026) they won’t resume until there are guarantees that the other ships won’t be attacked.

About 115 ships were able to move out of the strait in recent days, leaving about 500 still in the area, said Arsenio Dominguez, the agency’s secretary-general.

The opening of the alternative passage through the strait was expected to relieve pressure on the world economy and remove Iran’s main source of leverage in ongoing peace talks with the U.S.

The U.S. and Iran are still negotiating terms of the deal, including issues such as getting ships through the key strait and addressing the future of Iran’s stockpile of highly enriched uranium. Under the interim deal, the two sides have 60 days to work out the details.

Cargo ship attack poses a test for shipping

Shipping analysts said the drone strike cast a shadow over what had been a growing stream of trapped vessels finally leaving the Gulf and an increasing flow of tankers carrying crude oil.

“A week of widening commercial confidence in the Strait of Hormuz has hit its first significant test,” said marine data company Windward on X. It said that while the strait remains operationally open with 43 transits recorded after the incident, “the pace of normalisation has slowed.” On Wednesday (June 24, 2026) 78 vessels transited the strait, the highest since the war began, although below the pre-war averages of 130 or more per day.

At least two tankers reversed course while attempting to transit the strait on the UN-backed route near Oman after Iran insisted vessels use only the Teheran-approved routes, according to marine data and analytic firm Lloyd’s List Intelligence.

More than two dozen ships were still transiting the strait’s southern route after the attack, Lloyd’s said Friday (June 26, 2026).

U.S. has brokered a permanent peace deal with Iran, slated to be signed on Friday (June 19, 2026) in Switzerland, putting an end to war that lasted for over 100 days. The deal, aimed at reaching a nuclear peace agreement, between Tehran and Washington is being reportedly hailed by both sides, claimed media reports in Iran.

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Despite the positive development, an uncertainty looms large due to Israel’s ongoing military hostility with Iran-backed Hezbollah in Beirut, potentially suspected to endanger the deal. On Sunday (June 14, 2026), U.S. President Donald Trump had urged Israel to not ‘blow it’ after Israel’s military said it launched strikes on Hezbollah. Israel’s Prime Minister Benjamin Netanyahu responded back, saying “Israel will not tolerate firing into its territory”.

Who announced the deal?

Pakistan’s Prime Minister Shehbaz Sharif, who has been at the helm of U.S.-Iran ceasefire negotiations since April 12, took into X and confirmed the deal. Mr. Sharif said, “Both sides have declared the immediate and permanent termination of military operations on all fronts, including in Lebanon”.

He mentioned, “With the agreement now in place, mediators will facilitate a series of meetings this week. These pre-implementation discussions will lay the foundation for the technical talks and the official signing ceremony”.

Eventually, Mr. Trump confirmed the permanent peace deal in his post in Truth Social. He wrote, “The Deal with the Islamic Republic of Iran is now complete. Congratulations to all! I hereby fully authorize the toll free opening of the Strait of Hormuz, and, simultaneously herewith, authorize the immediate removal of the United States Naval blockade. Ships of the World, start your engines. Let the oil flow!”.

Israeli far-right Minister Ben Gvir slams U.S.-Iran deal, urges stronger campaign in Lebanon

What does the deal entail?

Following the announcement, the nitty-gritties surrounding the permanent peace deal remained obscure. With U.S. aiming for Iran to drop it’s nuclear plan, here are the probable issues being mentioned in the memorandum:

1. The status of Strait of Hormuz is likely to be open for everyone without any tolling arrangement. The key waterway is the intersection to one-fifth of the world’s oil flows. The United States has consistently opposed any shipping toll regime in the Strait, including proposals reportedly floated in talks with Oman. Reaffirming Washington’s position last month, the US President said: “The strait is going to be open to everybody. Nobody’s going to control it.”
2. A key clause is likely to be included on suspending military hostilities in Lebanon. This has a higher probability of being included in the memorandum. However, Trump did not make any mention of Lebanon on his Truth Social post.
3. President Donald Trump reiterated that “Iran will never have a nuclear weapon,” officials indicated nuclear negotiations would continue over the next 60 days. Trump also warned that Tehran could face renewed U.S. military action if talks fail. However, Iran insists its programme is peaceful and has not agreed to surrender its enriched uranium stockpile. The interesting part would be to take stock on Friday about U.S.-Iran nuclear agreement in the peace deal.

Timeline of negotiations

• April 2026 : A new diplomatic channel opened through Pakistan, with talks focusing on a broader settlement, including ceasefire terms, maritime security and the nuclear issue.
• June 8–14, 2026 : Mr. Trump announced movement towards an “immediate ceasefire”. Later, Pakistan said a final text of a peace agreement had been agreed. On June 14, the U.S. and Iran reached a framework deal providing for a 60-day ceasefire, reopening of the Strait of Hormuz and renewed nuclear negotiations.

Pakistan’s Interior Minister Mohsin Naqvi reached Tehran on Saturday (June 6, 2026) to push for peace amidst rising tensions between the U.S. and Iran, according to media reports.

It is Mr. Naqvi’s third visit to Iran in recent weeks, as Pakistan leads a diplomatic push to bring the two sides to the table.

Upon his arrival in Tehran, Mr. Naqvi was received by his Iranian counterpart Eskandar Momeni, Iran’s state-run Press TV reported.

During his visit, Mr. Naqvi will hold talks with various top officials, including Iranian Foreign Minister Abbas Araghchi, Iran’s semi-official news agency Tasnim reported.

Before departing for Iran, Mr. Naqvi met Prime Minister Shehbaz Sharif, a statement from the Prime Minister’s Office (PMO) said.

“Consultations also took place between the Prime Minister and the interior minister regarding his upcoming visit to Tehran. The Prime Minister provided guidance related to the visit,” the statement said.

The Interior Minister also briefed Sharif on his recent meetings on the sidelines of the Shanghai Cooperation Organisation summit in Bishkek, Kyrgyzstan.

Mr. Naqvi met his Iranian counterpart Momeni in Bishkek a day earlier, where they exchanged views on Pakistan-Iran relations and recent regional developments, according to a post by the Interior Ministry on X.

The meeting with Mr. Sharif was about the measures being taken to maintain peace and security across the country and ensure the protection of citizens, the PMO statement said.

The conflict in West Asia, which has paralysed global energy markets and disrupted trade, began after the U.S. and Israel launched attacks on Iran on February 28, prompting retaliatory action by Tehran.

The conflict was halted when a ceasefire was brokered on April 8. Since then, the two sides have been exchanging messages through Pakistan for peace talks.

In April, Pakistan hosted the first direct talks between the U.S. and Iran, but the two countries failed to reach a deal.