The ceasefire between the United States and Iran, which began on April 8, is facing another wave of intensification. Recent days have seen the U.S. conducting additional strikes against Iran, while Iran has retaliated by targeting Kuwait and Bahrain, alongside increasing Israeli activities in Lebanon. Previous conflicts during the past two months were swiftly managed, with both nations attempting to maintain a delicate balance between warfare and peace. Nonetheless, as this ceasefire prolongs, it risks becoming a prolonged deadlock in the Middle East, one that could have significant economic and political ramifications on an international scale.
There are four key challenges hindering progress in reaching a resolution. The first challenge is a lack of trust. Iran is skeptical about Donald Trump’s ability to negotiate a reliable agreement, fearing that Washington may abandon the deal yet again. There is also concern that any initial agreements on nuclear limitations could be followed by demands related to missile programs, regional policy changes, and further political concessions disguised as security assurances.
The second challenge is the lack of substantive communication. Since the meeting in Islamabad in April between U.S. Vice President JD Vance and Iranian Parliament Speaker Mohammad Bagher Ghalibaf, a direct dialogue channel has not materialized that could facilitate genuine political negotiations. Instead, discussions are being relayed through regional intermediaries and a series of proposals.
The third challenge stems from the divergent needs of both parties. Iran seeks specific commitments regarding which sanctions will be lifted, the timeline for unfreezing assets, enforcement mechanisms, and protections against future U.S. policy shifts. Conversely, Trump is looking for a more flexible memorandum of understanding that can be quickly publicized as a significant achievement. One side is focused on guarantees, while the other is more interested in headlines and triumphs.
The fourth challenge is rooted in domestic politics. Any agreement between Iran and the U.S. is politically fraught for both nations. In Washington, it could face backlash from Republican hawks and opposing Democrats, while in Tehran, emerging leaders may view a compromise that lacks substantial guarantees and sanctions relief following recent military actions as tantamount to surrender.
A fundamental issue is that both nations believe they are prevailing and that time favors their positions. Iran feels it has withstood the combined pressures from the U.S. and Israel, with its leadership encouraged by the state’s survival and increased leverage through the control of the Strait of Hormuz. Tehran perceives that the U.S. is more urgently in need of de-escalation, fearing that continued tensions could negatively impact U.S. fuel prices, global inflation, and domestic political dynamics.
Conversely, the U.S. interprets the situation as a demonstration of its military dominance. It believes that Iran’s proxies have been weakened, its deterrent capabilities undermined, and its economy strained. Washington expects Tehran will ultimately agree to a limited deal, as the alternative would lead to further isolation, increased sanctions, economic hardship, and greater military vulnerability.
However, the reality is that both sides are facing losses. For the U.S., the political, economic, and strategic costs are mounting. A ceasefire that frequently escalates into violence will keep energy markets volatile, expose Gulf allies to retaliation, and further challenge Washington’s ability to project stability in the region.
For Iran, merely surviving is not synonymous with victory. The nation grapples with a struggling economy and unproven leadership that must eventually justify why endurance has not resulted in tangible benefits. With inflation soaring to 77% in May and the rial plunging to 1.7 million against the dollar, the aftermath of January’s protests and the resulting violent crackdown, which reportedly left thousands dead, continue to loom large. While measures of repression and increased military presence may temporarily quell dissent, they cannot eliminate the underlying grievances that incited protests.
This precarious moment presents a significant risk. The ceasefire has remained intact just enough to avert a full-scale war, yet it falls short of paving the way for lasting peace. It has enabled both sides to maintain the illusion that prolonged discussions and delays will yield positive outcomes. However, deadlocks in the Middle East seldom remain stagnant, and sporadic escalations are indicative of this current situation.
Washington and Tehran still have a limited opportunity to convert this lull into a productive political dialogue. This necessitates establishing direct communication, expediting progress, and setting a clear and realistic timeline for future actions. Both parties must be willing to compromise and recognize that neither can achieve a sustainable resolution through military actions or blockades. It will also require decisive and courageous leadership from both sides to forge an agreement that may not satisfy all factions and critics. Without such efforts, the ceasefire initiated in April may be remembered not as a precursor to de-escalation, but rather as a precursor to renewed tensions.
Sanam Vakil serves as the director for the Middle East and North Africa program at Chatham House.
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