ISPI (Italian Institute for International Political Studies) - Middle East at War - Negotiating Under Fire: Iran Between War and Diplomacy - 4 June 2026

 

Med This Week NEGOTIATING UNDER FIRE: IRAN BETWEEN WAR AND DIPLOMACY The MED This Week newsletter provides informed insights on the most significant developments in the MENA region, bringing together unique opinions and reliable foresight into future scenarios. Today, we shed light on Iran’s perspective on the current negotiations with Washington and the country’s domestic situation amid the ongoing war with the United States and Israel. Following several weeks in which momentum toward a US-Iran agreement appeared to be at its highest point since the outbreak of the war on 28 February, negotiations are once again stagnating amid mutual exchanges of fire and the persistent risk of military escalation. Most recently, Iranian drone strikes hit Kuwait’s international airport, leaving several people injured and one person dead, after the US reportedly carried out what it described as “self-defence” strikes on Iran’s Qeshm Island. The attacks come after days of stalled discussions over a draft Memorandum of Understanding (MoU) that, by extending the ceasefire, is intended to pave the way for broader negotiations on the most contentious issues, including Iran’s nuclear programme. However, even the path towards a preliminary agreement remains fraught with key points of friction, particularly Lebanon and the Strait of Hormuz. On the one hand, despite the recent US-brokered conditional ceasefire between Hezbollah and Israel, Lebanon remains a potential breaking point in the negotiations. Iran has made an end to Israeli strikes on the country a prerequisite for any discussion, with Iranian Foreign Minister Abbas Araghchi recently warning that an attack on Beirut would trigger a “full-scale resumption of war.” On the other hand, US demands for an immediate reopening of the Strait of Hormuz clash with Tehran’s efforts to retain a degree of control over the waterway even after the conflict, making a return to the pre-war status quo unlikely. Yet, rather than serving as a unilateral instrument of leverage, the Strait of Hormuz has increasingly become a double-edged sword for Iran, particularly following the US naval blockade imposed on 13 April, whose implementation has significantly constrained Tehran’s shipping capacity. This has further strained an already fragile economy marked by currency depreciation, soaring inflation and mass job layoffs – pressures that also underpinned the outbreak of nationwide protests earlier this year. In this context, beyond seeking to assert regional influence through other dossiers, a key objective for Iran in the draft of the MoU is economic survival. While broader US sanctions relief remains tied to the nuclear file, Tehran is insisting on the unfreezing of foreign-held assets – reportedly exceeding $100 billion – as a central demand, although Washington is unlikely to agree to their full release. With negotiations unfolding under the shadow of war, it remains unclear whether Iran is prioritising a swift end to hostilities or the full attainment of its strategic objectives. What concessions is Tehran willing to consider? Where are its red lines? And what price is it ultimately willing to pay? Experts from the ISPI network discuss Iran’s position in the current negotiations with Washington and the country’s domestic situation amid the ongoing war with the United States and Israel. Who drives Tehran’s negotiating strategy? “The current balance of power within Iran revolves around a number of key military and political actors. As the Islamic Republic is a multi-centred political system, lacking a single chain of command or a unified leadership structure, decision-making is distributed among several institutions and individuals. In the context of the ongoing negotiations with the United States, the process is currently driven by President Pezeshkian, despite the constitutional constraints on the presidency, alongside Parliament Speaker Qalibaf, Secretary of the Supreme National Security Council Zolqadr, and Commander of the Islamic Revolutionary Guard Corps (IRGC) Vahidi. Although these figures do not possess the same degree of political influence, Iran’s foreign policy emerges from the interaction of their respective positions, ranging from the more diplomatic approach associated with the executive branch to the more assertive stance traditionally advocated by the IRGC. The key figure missing from this equation is Mojtaba Khamenei, the Supreme Leader. Having not appeared publicly since his appointment, it remains difficult to assess the extent of his political influence and his role in shaping the current dynamics of decision-making within the Islamic Republic.” Giorgia Perletta, Researcher, Università Cattolica del Sacro Cuore Lebanon at the core of Iran’s regional strategy amid a weakened “Axis of Resistance” “Although the so-called Axis of Resistance has weakened considerably compared to two years ago, Iran’s sense of encirclement remains acute enough that preserving its influence over Middle Eastern countries is still a matter of vital importance. Throughout the latest phase of the conflict, the Islamic Republic has recalibrated its use of regional allies, continuing to deploy them to open a second front against Israel and pressure the United States into withdrawing from the Camp Victory military installation in Iraq. By inserting a Lebanese ceasefire among the negotiating conditions for a US-Iran agreement, Tehran seeks to reassert its grip on the Levantine country. Yet while Iran may rhetorically frame the new ceasefire as a victory, the reality on the ground could tell a different story. In particular, the establishment of pilot zones in southern Lebanon – designed to facilitate the return of displaced Lebanese civilians and placed under the control of the Lebanese Armed Forces – may represent a stratagem to strengthen the role of the state and gradually erode Hezbollah’s stranglehold, without provoking a direct confrontation. This will require a cautious and incremental approach over time; nonetheless, it is hard to imagine Iran standing idly by as its hold on the country loosens.” Luigi Toninelli, ISPI MENA Centre After the war: reopening Hormuz, preserving deterrence “Iran sees the Strait of Hormuz not as a ‘legal issue’ but as a ‘geopolitical asset’. From Tehran’s perspective, Hormuz is not merely a commercial waterway; it is part of its architecture of deterrence and balancing. In realist logic, states do not voluntarily give up their instruments of pressure, especially when facing a superior power. Iran will restore normal shipping to reduce costs, but will also seek to preserve its capacity for surveillance, control, and implicit threat as a strategic lever. Freedom of passage will return, conditional on a credible end to hostilities by the United States and a clear commitment not to repeat the war. More precisely: Hormuz will reopen, but it will not leave Iran’s deterrence toolkit.” Seyed Mojtaba Jalalzadeh, International Affairs Analyst  Amid a fragile ceasefire, Iran bets on its capacity to absorb the blow “The ceasefire that came into effect nearly two months ago has thus far held against the resumption of major hostilities. But as Washington and Tehran continue to trade proposals and counterproposals on a diplomatic framework to stabilise and build on it, they also continue to test its limits with dueling blockades in the Strait of Hormuz, tit-for-tat exchanges, and Iranian strikes at US allies in the Gulf. Iran’s position seems premised on the belief that its ability to absorb military and economic costs exceeds that of the US and its regional partners, thereby underscoring the risks of returning to a full-on confrontation while holding a firm line in negotiations.” Naysan Rafati, Senior Analyst, International Crisis Group (ICG) Talks with the US double as a bid for Iran’s economic survival “Aside from the end of military actions, the main gain for Iran in the negotiations is sanctions relief and the economic benefits that would come with the unfreezing of assets, alongside potential new waivers in specific areas related to trade, investment, and oil exports. While the regime is clearly negotiating for its own economic survival and stability, any economic reprieve would also gradually trickle down to ordinary Iranians, albeit far more slowly given the scale of economic and infrastructural damage caused by the war, daily inflation, the continued devaluation of the Iranian currency, and the growing number of people falling below the poverty line. Tehran is likely prepared to accept stricter monitoring and limitations on its nuclear programme, but remains highly unlikely to accept terms perceived domestically as capitulation, particularly as it prepares to confront what may become the most serious wave of domestic discontent following the state massacre of Iranians in January.” Mehran Haghirian, Director of Research and Programmes, Bourse & Bazaar Foundation  Iran’s nuclear redlines hold firm despite the war “The war has not produced the kind of shift by Iran on its nuclear program that the Trump administration hoped for. Fundamental redlines remain: Tehran views the program as a strategic imperative, inalienable Non-Proliferation Treaty (NPT) right, and sensitive domestic political issue for its hardline base. Iran might show flexibility like time-bound limits on uranium enrichment and down-blending or shipping abroad of its 60% highly enriched uranium stockpile, but its reported positions thus far do not exceed the limits set by the Joint Comprehensive Plan of Action (JCPOA). As talks proceed and economic pressures intensify, the regime might show greater flexibility based on the level of US sanction relief it is offered, but so far reported relief proposals seem modest. We should not expect a long-term, comprehensive US-Iran nuclear arrangement any time soon.”  Farzan Sabet, Managing Researcher, Geneva Graduate Institute The war’s rally-around-the-flag effect hasn’t erased Iranians’ grievances “Three months into the US-Israel war on Iran, the conflict has generated both a rally-around-the-flag effect among the Islamic Republic’s traditional supporters and a broader rise in nationalism among many Iranians who remain critical of the country’s policies. Opposition to the war has been driven not only by concerns over sovereignty but also by the toll of attacks on schools, universities, hospitals, cultural sites, and other civilian infrastructure. The result has been a degree of national cohesion that cuts across political divides. However, this should not be mistaken for the disappearance of public discontent. Criticism has largely been deferred by immediate external security threats. As the threat recedes, underlying economic, political, and social grievances, including hyperinflation, governance challenges, political and social freedoms, and internet restrictions, are likely to reemerge forcefully in public debate, requiring serious reflection and reform by the state.” Negar Mortazavi, Senior Fellow, Center for International Policy; Host, Iran Podcast ISPI - Italian Institute for International Political Studies Edited by Antonia Ricciardiello, ISPI MED – MEDITERRANEAN DIALOGUES is the annual high-level initiative promoted by the Italian Ministry of Foreign Affairs and International Cooperation and ISPI (Italian Institute for International Political Studies) in Rome with the aim to rethink traditional approaches to the area complementing analyses of current challenges with new ideas and suggestions and to draft a new “positive agenda”, addressing shared challenges at both the regional and the international level. The opinions expressed in this newsletter are solely those of the authors and do not necessarily reflect the opinions of the Ministry of Foreign Affairs and International Cooperation and ISPI.