US, Israel and Iran agree to ceasefire as Donald Trump pulls back on threats

Questions have now emerged over contradictory proposals to halt the region-wide war and reopen the vital Strait of Hormuz

Iranian government supporters waving Iran flags on the streets of Tehran (AP Photo/Francisco Seco)

Iran, the United States and Israel have reached a two-week ceasefire as US President Donald Trump pulled back from his threats to destroy Iranian “civilisation”.

But questions emerged over what appeared to be contradictory proposals to halt the region-wide war and reopen the vital Strait of Hormuz, with Iran insisting it would charge tolls to passing ships and continue to enrich uranium.

Mr Trump then suggested American warships would be “hangin’ around” the waterway, through which 20% of all oil and natural gas passes in peacetime. That could be a potential flashpoint as the days goes on.

Mr Trump initially said Iran had proposed a “workable” 10-point plan that could help end the war he launched with Israel on February 28. But he later called the plan fraudulent without elaborating. Mr Trump has said ending Iran’s nuclear programme was a key war goal.

Israel backed the US ceasefire with Iran, but Prime Minister Benjamin Netanyahu said on Wednesday it will not stop his country’s fight against Hezbollah in Lebanon, which continued through the morning. That contradicted comments from Pakistan, a key mediator, which said the ceasefire included the fighting in Lebanon.

Pakistan said that talks over cementing a peace plan would begin in Islamabad as soon as Friday. Pakistan also said the ceasefire was to begin immediately, while Iran launched attacks on Gulf Arab states and Israel soon after.

Oil prices fell and stocks rose as Asian markets opened on Wednesday after the eleventh-hour agreement to reopen the strait.

In the streets of Tehran, pro-government demonstrators screamed “death to America, death to Israel, death to compromisers” after the ceasefire announcement and burned American and Israeli flags. It shows the ongoing anger from hardliners, who had been preparing for what many assumed would be an apocalyptical battle with the United States.

Pro-government demonstrators on the streets of Tehran (AP Photo/Vahid Salemi)

Iranian foreign minister Abbas Araghchi said passage through the strait would be allowed under Iranian military management. It was not clear whether that meant Iran would completely loosen its chokehold on the waterway.

The plan allows for both Iran and Oman to charge fees on ships transiting through the strait, according to a regional official who added that Iran would use the money it raised for reconstruction.

But that would upend decades of reliance on the strait as an international waterway free for transit and will likely not be acceptable to the Gulf Arab states, which also need to rebuild after repeated Iranian attacks targeting their oilfields.

“Big money will be made. Iran can start the reconstruction process,” Mr Trump said on social media.

It is not clear what happens when the two weeks of the ceasefire ends.

There is little public sign that Iran and the United States had resolved disagreements over the fate of Iran’s nuclear programme, its ballistic missiles or its regional proxies – among the issues that the United States and Israel cited as justifications for launching the war.

In addition to control of the strait, Iran’s demands for ending the war include withdrawal of US combat forces from the region, the lifting of sanctions and the release of its frozen assets.

All those likely are non-starters for Mr Trump and potentially other Western nations. Iran’s chokehold on the strait roiled the world economy and raised the pressure on Mr Trump to reach a deal.

Donald Trump said ending Iran’s nuclear programme was a key war goal (AP Photo/Julia Demaree Nikhinson)

Since the war began, Mr Trump has repeatedly backed off deadlines just before they expire. In doing so again on Tuesday, Mr Trump said in a social media post he had come to the decision “based on conversations” with Pakistan Prime Minister Shehbaz Sharif and General Asim Munir, Pakistan’s powerful army chief.

Missile alerts were issued in the United Arab Emirates, Israel, Saudi Arabia, Bahrain and Kuwait after the ceasefire announcement. A gas processing facility in Abu Dhabi was ablaze after incoming Iranian fire, officials said.

Earlier on Tuesday the Israeli military said it attacked an Iranian petrochemical site in Shiraz, the second day in a row it hit such a facility. The military later said it struck bridges used by Iranian forces to transport weapons and military equipment.

More than 1,900 people had been killed in Iran as of late March, but the government has not updated the war’s toll for days.

In Lebanon, where Israel is fighting Iran-backed Hezbollah militants, more than 1,500 people have been killed and a million people have been displaced. Eleven Israeli soldiers have died.

In Gulf Arab states and the occupied West Bank, more than two dozen people have died, while 23 have been reported dead in Israel, and 13 US service members have been killed.