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Shehbaz signs Islamabad MoU as mediator between US, Iran; Trump denies $300bn payout to Iran as Khamenei okays deal despite ‘different view’

PM Shehbaz said that the Islamabad MoU would enter into force with immediate effect

Prime Minister Shehbaz Sharif signs the Islamabad Memorandum of Understanding as mediator, formally sealing the peace agreement between Iran and the US, in Islamabad, June 18, 2026. — X/@PakPMO
Prime Minister Shehbaz Sharif signs the Islamabad Memorandum of Understanding as mediator, formally sealing the peace agreement between Iran and the US, in Islamabad, June 18, 2026. — X/@PakPMO

ISLAMABAD: Prime Minister Shehbaz Sharif on Thursday signed the historic Islamabad Memorandum of Understanding (MoU) as a mediator.

The Prime Minister’s signatures also formalised a major diplomatic breakthrough between the United States of America and the Islamic Republic of Iran.

Earlier, US President Donald Trump signed the document while visiting French President Emmanuel Macron at the Palace of Versailles. Concurrently, Iranian President Masoud Pezeshkian signed the MoU in Tehran.

The Prime Minister’s Office released images of Prime Minister Shehbaz Sharif signing the MoU as the mediator. The Prime Minister also displayed the finalised document bearing the signatures of both the US and Iranian presidents and himself.

The Prime Minister earlier on Thursday announced the electronically signing of the peace deal between the US and the Iranian Presidents “I am honoured to announce that the historic ‘Islamabad Memorandum of Understanding’ has been electronically signed today between the United States of America and the Islamic Republic of Iran. The Memorandum has been signed by honourable Presidents of both the countries and also endorsed by me as the mediator,” the Prime Minister announced on his X timeline.

Prime Minister Shehbaz said that the Islamabad MoU would enter into force with immediate effect and as a first step, Iran would instantly reopen the Strait of Hormuz and the United States would immediately lift the naval blockade. The Prime Minister extended heartfelt congratulations to US President Donald Trump for his commitment to diplomacy, and expressed profound appreciation to Supreme Leader of Iran, Ayatollah Seyyed Mojtaba Hosseini Khamenei, and Iranian President Masoud Pezeshkian for their wisdom and statesmanship.

He also commended the key contributions of the respective negotiating teams, regional partners including Qatar, Saudi Arabia, Turkiye and Egypt, as well as Field Marshal Syed Asim Munir for his instrumental role in advancing regional stability.

Meanwhile, President Dr. Masoud Pezeshkian, while conveying his best wishes for the people of Pakistan, said that Iran was keen to enhance and expand its bilateral ties with Pakistan across all areas of mutual interest.

The Prime Minister received a telephone call from Dr. Masoud Pezeshkian Thursday afternoon that lasted over thirty minutes. This was the first contact between the two leaders since the signing of the historic Islamabad Peace Deal, the PM Office said in a statement.

The Prime Minister congratulated President Pezeshkian, the Iranian leadership and the brotherly people of Iran, on the signing of the historic peace deal. This landmark deal, he said, would not only help restore peace in the region, but also go a long way in rebuilding the Iranian nation and further strengthening Pakistan-Iran ties, across all areas of mutual interest.

He also conveyed his respectful regards to Ayatollah Sayyid Mojtaba Hosseini Khamenei, the Supreme Leader of Iran. While lauding Iran’s decision to sign the peace deal, the Prime Minister wished the Iranian side success in the next phase of negotiations and assured the Iranian President of Pakistan’s continued support to Iran, both as a brotherly and neighbouring country, in all spheres.

On behalf of the Iranian nation as well as on his own behalf, President Pezeshkian thanked the Prime Minister and Field Marshal Syed Asim Munir, for their extremely critical roles in steering the mediation process, with great skill and sincerity, that had ensured its success. He said that Iran would always remember Pakistan’s positive and constructive efforts and its support for Iran during these difficult times.

Both leaders agreed to visit each other’s capitals at the earliest possible opportunity to carry forward the excellent cooperation between the two sides in bilateral as well as regional matters. They also agreed to remain in touch in the coming days.

Meanwhile, Prime Minister Shehbaz Sharif has postponed a visit to Switzerland for a US-Iran ceremony because their agreement on ending the Middle East war had been signed remotely, his spokesman told AFP on Thursday.

“The proposed visit has been postponed as the Islamabad Memorandum of Understanding has already been electronically signed, has entered into force, and is now under implementation,” spokesman Mosharraf Zaidi said, adding Pakistan would support the next phase of several “technical-level” tracks.

President Asif Ali Zardari Thursday warmly welcomed the signing of the Islamabad Memorandum of Understanding between the United States and Iran, describing it as a historic moment for the region and the world.

“The conflict which began in February 2026 inflicted immense suffering upon the peoples of the region and caused severe disruption to global energy supplies, trade and economic stability,” he said in a statement issued by the Media Wing of the Aiwan-e-Sadr.

The President expressed hope that such a tragedy would never be repeated and that the nations of the region would now devote their energies to development, prosperity and the well-being of their peoples.

He paid tribute to Prime Minister Shehbaz Sharif, Deputy Prime Minister and Foreign Minister Ishaq Dar, Field Marshal Syed Asim Munir and Minister for Interior Mohsin Naqvi for their tireless diplomatic efforts that contributed significantly to bringing the parties to an agreement.

He noted that Pakistan had played a principled, balanced and constructive role throughout the crisis, consistently calling for dialogue, restraint and a peaceful resolution of disputes while maintaining engagement with all parties concerned.

He also appreciated the leadership of President Donald Trump, Ayatollah Seyyed Mojtaba Hosseini Khamenei, President Masoud Pezeshkian and Foreign Minister Abbas Araghchi for ensuring a diplomatic resolution of the conflict and advancing the cause of peace.

President Zardari also acknowledged the valuable support of brotherly nations, including Qatar, Saudi Arabia, Turkiye and Egypt, as well as the Russian Federation and China, whose efforts and encouragement of dialogue contributed to the pursuit of peace.

He called upon all parties to implement the MoU fully and expedite efforts to reach the final agreement within the stipulated timeframe to ensure lasting peace and progress. “Heroes are those who have ended the war, not those who are eager to start one,” he said.

He hoped that the MoU, which has Islamabad and Pakistan written all over it, would serve as the foundation for a durable and comprehensive peace in the region, enabling nations to focus on economic development, energy cooperation and the advancement of their peoples.

“War brings nothing but destruction and misery. Peace is the only path to progress,” he said, adding: “Pakistan will continue to stand in solidarity with all brotherly nations of the region in their collective journey towards peace and prosperity.”

Meanwhile, Iran’s supreme leader Ayatollah Mojtaba Khamenei said on Thursday that he had approved a deal with the United States to end the Middle East war despite having a “different view”, without elaborating.

“In principle, I had a different view (about the memorandum of understanding), but I issued my permission due to the commitment that the honourable (Iranian) president, as the chairman of the Supreme National Security Council, gave me on behalf of himself and other members to protect the rights of the Iranian nation and the Resistance Front,” Khamenei said in message read on state television

Khamenei said Trump had “used all kinds of levers” to secure the deal “out of desperation”. In his message, Khamenei noted that he received assurances from Pezeshkian about the deal and that it would not be accepted “if the American side wants to make excessive demands”. “It is obvious that the face-to-face negotiations that will be held in the future will not mean accepting the enemy’s point of view,” he added.

Iran’s Supreme National Security Council said in a statement that the country’s Persian Gulf Strait Authority will take measures to issue fast authorisations to ships wanting to pass through the Strait of Hormuz as per the MoU signed by Tehran and Washington. Measures on mine clearance will be carried out under the Islamabad MoU, though ships are advised to stick to the path and timing allocated by the authority, the statement published by state media added.

US President Donald Trump said on Thursday that the United States expects “a complete ceasefire on all fronts,” including Lebanon, Hezbollah, and Israel. “We encourage everyone in the Middle East Region to maintain their commitment to allowing our negotiations to beautifully unfold,” Trump wrote on Truth Social.

President Trump said the deal with Iran to end the war was a “victory” for the United States, rejecting mounting criticism including from some in his own Republican party. “There is no 300 Billion Dollar payment to Iran by the US That’s Fake News! All there is for the U.S. is Success, Lower Oil Prices, and Victory. Check out the Stock Market. Dumocrat propaganda at play!!!” Trump said in a post on his Truth Social network.

The US on Thursday lifted a blockade of Iranian ports imposed during the Middle East war, as uncertainty surrounded planned talks in Switzerland aiming to take the accord further.

The signing of the deal by Trump and Iranian President Masoud Pezeshkian set in motion a 60-day period for talks on wider issues between the two foes, including the Iranian nuclear programme.

But there was uncertainty over the next steps, and it remained unclear if the two sides, who have had no diplomatic relations following the 1979 Islamic revolution, would hold a signing ceremony and talks in Switzerland on Friday as previously announced.

Oil prices tumbled after the agreement was inked, though activity was still muted in the Strait of Hormuz. American forces on Thursday lifted their parallel naval blockade of Iranian ports that had prevented ships from sailing to or from the Islamic republic, the US military said, noting that American warships “will remain in the general area”.

Three Saudi oil tankers left the Gulf through the strait on Thursday, maritime trackers said, while the loaded liquefied natural gas vessel (LNG) Mraikh became the first such French vessel to make the transit since the start of the conflict.

Vance said he planned to go to Switzerland for “technical negotiations” with Iran “this weekend” rather than Friday, but emphasised that the plan “could change”.

In Iran, the Tasnim agency said “nothing has been confirmed” about the Iranian delegation’s trip to Switzerland.

President Trump lashed out at critics of his agreement with Iran, calling those who accused him of offering concessions to end the war “fools”.

In a sudden development after uncertainty over when the deal agreed earlier this week would be formally signed, Trump put his name to it in thick black ink at a candlelit dinner with French President Macron at the Palace of Versailles outside Paris on Wednesday. Macron -- for whom the signing at the palace, which hosted the signing of the treaty that ended World War I, was an immense coup following his hosting of the G7 summit -- shouted “bravo” as Trump signed.

“These fools, who think I haven’t been tough enough on Iran, when the Stock Market Just Hit A RECORD HIGH, and Oil prices are ‘tumbling’ down, are either jealous, bad people, or stupid,” Trump posted on social media hours after signing the deal.

Iranian President Masoud Pezeshkian also signed the agreement, Iranian foreign ministry spokesman Esmaeil Baqaei said, adding that “now it is time to test the implementation of the agreement”.

There remained confusion over the next steps, with the accord originally supposed to have been signed at an exclusive mountain-top resort in Switzerland on Friday by Iran’s chief negotiator and parliament speaker, Mohammad Bagher Ghalibaf, and US Vice President JD Vance. Baqaei said an in-person ceremony was no longer needed.

UN atomic agency chief Rafael Grossi told reporters in Geneva it was ready to begin defining the “concrete steps” that will need to be taken to implement a US-Iran deal.

US Vice President JD Vance on Thursday defended the deal to end the Iran war, saying he would likely head to Switzerland for talks to turn it into a long-term agreement. “The Iranians have to perform,” Vance told a briefing at the White House. “If they don’t perform as we’ve said before, they don’t get any of the benefits of the bargain.” Vance rejected claims that the deal rewards Iran without achieving Trump’s war aims.

Vance said Iran would only get the rewards if it proves that it has complied with the terms that will be hammered out in a 60-day period that he said began on Thursday following the signing of the MoU. Vance said he now planned to head to Switzerland for technical talks on a long-term deal, although the arrangements were not yet finalized.

Iran said on Thursday that its missile programme would not be part of future negotiations with the United States. “Our missiles do not like at all to be talked about by anyone,” foreign ministry spokesman Esmaeil Baqaei said in an interview with Iranian state television. “Iranian missiles are only for firing, not for negotiations. Iran’s defence capability will not be discussed in any way, in any process or with any party.”

Crude futures slid around two percent on Thursday after a deal aimed at ending the US-Israeli conflict with Iran that restricted shipping in the Strait of Hormuz, causing a spike in energy prices. Brent North Sea Crude was down 2.5 per cent at $77.55 a barrel

US consumers saw some relief at the fuel pump on Thursday, as the average price of a gallon of regular gasoline fell below $4 for the first time since March, according to the AAA motor club. The average price of a gallon of regular gasoline logged in at $3.99 on Thursday, according to AAA. It remains 34 percent higher than on the day before the war was launched.

Qatar, a key negotiator in the deal to end the war between the US and Iran, said on Thursday the agreement served as a firm basis for further talks. The Gulf state’s foreign ministry said in a statement that the deal “represents a solid foundation for advancing to the next stage of negotiations between the American and Iranian parties”.

China said Thursday it “welcomes” the news that the United States and Iran have signed a deal to end the Middle East war, urging both sides to continue their cooperation in a second round of negotiations. “China welcomes this development and hopes that all relevant parties -- including the US and Iran -- will uphold the spirit of their agreement and earnestly honour their commitments,” foreign ministry spokesman Lin Jian told a regular news conference.

The US-Iran framework agreement to end the Middle East war proves that nuclear weapons provide no strategic advantage, the International Campaign to Abolish Nuclear Weapons (ICAN) said Thursday.

The United States on Thursday sanctioned two prominent Lebanese officials as well as companies associated with a business magnate over allegations that they obstructed the country’s peace process and delayed the disarmament of Hezbollah.

The head of Hezbollah’s parliamentary bloc, Mohammad Raad, said on Thursday that Israel’s war in Lebanon had “failed” to eliminate the Iran-backed group.

Prime Minister Benjamin Netanyahu underscored the importance of maintaining close ties with the United States on Thursday, saying Washington had stood by Israel during the Middle East war. Netanyahu’s remarks came as relations with his country’s most important ally have come under strain over the US-Iran agreement to halt the conflict, which Israeli analysts have sharply criticised, arguing it effectively locks in Iranian gains while deferring the issue most sensitive to Israel: its security.

“The struggle is not yet over, and further challenges lie ahead. They require calm judgement, steadfast defence of Israel’s security interests, and at the same time the preservation of our vital relationship with our American friends, who stood shoulder to shoulder with us in this fight -- a partnership we deeply appreciate,” Netanyahu said at a function, according to a statement issued by his office.

The Israeli military said on Thursday it will continue operating in southern Lebanon and “remove threats” beyond its so-called security zone.

Israeli strikes in south Lebanon killed three people on Thursday, Lebanese state media said.

Lebanese authorities have arrested a citizen suspected of having imported parts used to manufacture Hezbollah drones, a judicial source told AFP on Thursday. Global trade in fertilisers crucial to agriculture harvests worldwide have slumped 30 percent since the start of the year, as the Mideast war sent prices soaring and led several countries to restrict exports, the UN’s Food and Agriculture Organization said Thursday.

Switzerland confirmed Thursday that “initial negotiations” on implementing a US-Iran memorandum of understanding on ending the Middle East war were planned to take place at a Swiss resort complex on Friday. “Currently, the plan remains for the United States and Iran, along with the mediators Pakistan and Qatar and other involved countries, to meet tomorrow at the Burgenstock for initial negotiations on the implementation of the agreement,” the Swiss foreign ministry said.

Iran’s Foreign Minister Abbas Araghchi welcomed supreme leader’s message, saying foreign policy apparatus will use full capacity to secure Iran’s interests, Iranian media reported.