On May 29, it was announced that the US and Iran were near agreement on a short-term deal – an MoU – that would see the re-opening of the Strait of Hormuz followed by a 60 day window in which they would discuss other subjects, including the vexed nuclear issue. It was announced, too, that President Trump had convened a Situation Room meeting to give his final verdict on the deal.But what we hear now is that Trump has introduced new and tougher conditions on what were already maximalist terms that had been projected earlier. For its part, Iran’s position is that the MoU has not been finalised and negotiations are still ongoing. The peculiar thing is that Trump believes that he is the victor and is doing Teheran a favour by offering a deal.Illustration: Pariplab Chakraborty.In a post on Truth Social just before the Situation Room meeting, Trump laid out the demands as he saw them: “Iran must agree that they will never have a Nuclear Weapon or Bomb. The Hormuz Strait must immediately open, no tolls, for unrestricted shipping traffic, in both directions.” He went on to add that the US would recover the enriched uranium “in coordination with the Islamic Republic or Iran, plus International Atomic Energy Agency, and DESTROYED. No money will be exchanged, until further notice. “The whole world is watching this process play out with a sense of bewilderment. After months of catastrophic conflict that began with a massive joint US-Israeli decapitation strike on February 28—killing Supreme Leader Ali Khamenei—the regional landscape lies in ruins. Millions are displaced, supply chains are broken, and crude hovers near $100 a barrel.The moment is particularly fraught for India which has seen the fourth hike in fuel prices in the past month and, the rupee is near the Rs 100=$1 level. India gets some 50% of its oil and LNG through Hormuz and about 90% of its LPG. Equally important, fertilizer raw material in the form of ammonia, phosphate rock and sulphur as well as finished fertilizer like diammonium phosphate and phosphoric acid originate or pass through the Gulf region. In addition, a range of chemical products used for the pharma industry, too, depend on the Gulf.The draft agreement allegedly includes provisions to end the parallel war between Israel and Hezbollah, alongside mutual promises of non-interference. Yet, just hours before diplomatic optimism peaked last Friday, the US military launched targeted strikes on an Iranian drone facility near the Strait of Hormuz, triggering a retaliatory strike by the Islamic Revolutionary Guard Corps (IRGC) against an American base in Kuwait. These are not the actions of two parties nearing a grand bargain.How serious is the proposal?At first sight, all this looks like some normal hard bargaining. But look deeper and there are causes for considerable alarm. As it is, the proposed framework does not resolve the structural problems of US-Iran relations; it merely provides a temporary pause for both sides to reload. Worse, there is a difference of perception with regard to the war. Trump believes the US has defeated Iran comprehensively, while Tehran thinks that Washington keenly wants a deal and is not seeking another confrontation.Consider the current draft MoU. The US is demanding that Tehran surrender its entire remaining stockpile of highly enriched uranium, dismantle its newly enforced “supervision area” in the Strait of Hormuz, and provide ironclad guarantees for international maritime transit. In exchange, Washington is dangling a partial lifting of its naval blockade, limited sanctions waivers for oil exports, and the release of a fraction of Iran’s frozen assets.Consider, too, that a day before the US launched its attack amidst negotiations with Iran on February 28, Omani foreign minister Badr bin Hamad al Busaidi told CBS that a peace deal was within reach and as per agreement “Iran will never, ever have a nuclear material that will create a bomb…” Further the existing enriched material in Iran would be “down-blended to the lowest level possible.” He added that Tehran would accept full verification by the International Atomic Energy Agency and that he had conveyed this directly to Vice-President J.D. Vance.But we are not sure of Trump’s position which seems to be shaped as much by what is happening in West Asia as from domestic calculations. Faced with criticism from Republican Party hardliners, Trump suddenly introduced a new element into the negotiations. In a conference call with the leaders of Saudi Arabia, UAE, Qatar, Pakistan, Turkey, Egypt, Jordan and Bahrain, he said all of them must join the Abraham Accords – a series of US-brokered agreements to formalise diplomatic, economic and security relations between Israel and the nations of West Asia. Just how seriously he takes this proposal is not clear.For the Trump administration, this is the equivalent of “maximum pressure” taken to its absolute kinetic extreme. The White House operates under the premise that because the initial wave of Operation Epic Fury severely degraded Iran’s air defences and eliminated its top leadership, Tehran has no choice but to accept a dictated peace. Trump’s recent public ultimatum—that there will either be a “great and meaningful deal” or “no deal at all”—reflects a persistent American miscalculation: that tactical military dominance automatically translates into permanent political compliance.It is hard to see what the Iranians would get out of an agreement of this kind or why they would agree to it. They have faced a terrible bombing campaign and do not see themselves as a defeated party. The conditions sought to be imposed on them on the nuclear front are ones that they had broadly agreed to, only to find themselves being attacked treacherously.This assumption also completely misunderstands the internal dynamics of Tehran. Far from a defeated state ready to capitulate, Iran is a wounded regional power undergoing a volatile domestic transformation. The conflict has fractured the Iranian political establishment, turning the streets of Tehran into a high-stakes ideological battlefield.On one side, pragmatic hardliners aligned with Majlis speaker Mohammad Bagher Ghalibaf are trying to spin the interim deal as a victory. On the other side, an ultra-extremist faction has openly blasted the negotiations, questioning why Iran should ever commit to Washington’s nuclear red lines.Short-sightednessEven if the MoU is signed, it will rest on a foundation of profound instability. The core driver of Iranian compliance is economic survival, not a shift in strategic intent. Decades of structural mismanagement, compounded by the recent destruction of critical infrastructure, have left the Iranian population struggling to afford basic necessities. The regime needs sanctions relief to prevent its domestic collapse.Once the naval blockade is lifted and oil revenues begin to flow back into Tehran’s coffers, the fundamental drivers of Iranian revisionism will re-emerge, this time perhaps in the hands of hard-line elements of the IRGC. A regime whose foundational identity is built on anti-Americanism and an end to the Israeli occupation of Palestine cannot be bribed into permanent moderation by a few billion dollars in asset releases. But the bigger issue for Tehran is trust. Having been attacked twice in the midst of negotiations, they feel that Washington is again trying to lull it into lowering its guard. The only deterrent Iran has is its continued threat on Hormuz and its nuclear capacity which it is willing to temporarily suspend, but not forever.The US strategy is short-sighted. By focusing strictly on immediate transactional wins – getting the uranium out of Iran and opening the shipping lanes – it is ignoring the long-term calculus. Washington has paid an immense reputational and diplomatic cost for this conflict, alienating several NATO allies who refused to back the military campaign. The Trump style of negotiating as a strategy of deception will make it difficult for the Iranians to trust any arrangement with the US.History will judge the 2026 Iran War not by the intensity of its opening salvos, but by the durability of its conclusion. The current negotiations are stuck on the exact same fault lines that broke the 2015 JCPOA: Hormuz control, uranium disposal, and Trump’s fundamental unpredictability. Pretending that a signed piece of paper will magically bridge this chasm of distrust is a fantasy.To be blunt, if the US wants to alter Iran’s strategic outlook, it would require a prolonged military campaign with a commitment of boots on the ground and even then there will be no guarantee of success. But what we see is that the US wants an agreement, yet it keeps on imposing conditions that Iran will not accept.The ships may soon pass through the Strait of Hormuz once again, and the oil may flow, but the fuses are still burning. Unless the structural realities that shape the conflict are addressed, the next explosion will make the war of 2026 look like a mere prelude. For the world and, in particular, India, this could be akin to the economic disaster that was brought on by the 1973 oil shock. This is the time that New Delhi needs to get off its reactive couch and rally middle powers to push for a more durable settlement. Such a settlement would have to address Israel’s expansionist policies, its nuclear weapons, along with requiring action from Teheran, Hezbollah and Hamas.Manoj Joshi is a distinguished fellow with the Observer Research Foundation in Delhi.This piece was first published on The India Cable – a premium newsletter from The Wire – and has been updated and republished here. To subscribe to The India Cable, click here.