President Donald Trump and Vice President JD Vance have argued that the agreement, reached following high-level negotiations last week, would direct billions of dollars in previously restricted Iranian assets toward purchases of U.S. food and medical supplies, including corn, wheat and soybeans.

The disagreement emerged as Washington and Tehran began implementing a 60-day memorandum of understanding designed to halt hostilities and create space for broader negotiations on unresolved issues between the two countries.

Under the arrangement, Iran would regain access to international oil markets during the negotiation period, while restrictions on certain Iranian assets held abroad would be eased. The agreement would also facilitate the reopening of the Strait of Hormuz, a critical maritime corridor for global energy shipments.

Responding to criticism that the deal does not directly address Iran’s nuclear program, ballistic missile development or support for regional armed groups, Trump defended the agreement on Tuesday, saying Iranian assets would remain under U.S.-controlled escrow mechanisms and be used to purchase goods exclusively from American suppliers.

The administration has presented the proposal as an economic benefit for U.S. agriculture, a sector that has faced fluctuating export demand in recent years.

Iranian officials, however, publicly disputed Washington’s interpretation of the agreement. Foreign Ministry spokesperson Esmail Baghaei said purchasing decisions would be determined by market considerations, including quality and pricing, rather than by conditions imposed by the United States.

Iran’s ambassador in Geneva, Ali Bahreini, also rejected suggestions that Washington or third countries would control the use of Iranian assets once released, stating that decisions regarding the funds would remain solely in Iran’s hands.

A U.S. official, speaking on condition of anonymity, dismissed the contradiction and suggested Iranian leaders were tailoring their comments for domestic audiences.

The dispute has fueled uncertainty among sanctions experts and former officials familiar with the mechanics of financial restrictions on Iran.

Under previous sanctions regimes, proceeds from Iranian exports, including oil and electricity sales, were often deposited into escrow accounts abroad and could only be accessed for approved humanitarian transactions such as food and medicine purchases.

On Monday, the U.S. Treasury authorized the sale of Iranian oil, petrochemicals and petroleum products through Aug. 21 as part of the interim arrangement. The authorization did not specify whether released funds would remain subject to escrow restrictions.

Analysts say the legal and financial mechanisms governing the assets remain unclear. Richard Nephew, a former sanctions official who worked on Iran policy during the Obama and Biden administrations, said Washington could attempt to require foreign financial institutions to direct funds toward purchases from U.S. suppliers, but enforcing such conditions could prove difficult.

Joseph Glauber, a research fellow emeritus at the International Food Policy Research Institute, noted that Iran already sources significant quantities of agricultural products from countries including Brazil, India, Türkiye, Canada, Australia, Argentina and members of the European Union. Redirecting those purchases exclusively toward American exporters could disrupt established trade relationships.

Supporters of a tougher sanctions policy have also sought clarification. Richard Goldberg, a former Trump administration official now affiliated with the Foundation for Defense of Democracies, said additional details would be needed to determine whether the agreement genuinely restricts Iranian purchases to U.S. agricultural products.

The competing interpretations underscore broader questions surrounding the agreement, whose final terms and enforcement mechanisms remain under negotiation as Washington and Tehran continue talks over a more comprehensive settlement.

The disagreements emerged as the United States pursued an agreement with Iran aimed at ending hostilities and reopening the Strait of Hormuz, a critical artery for global energy shipments. Netanyahu reportedly argued for maintaining pressure on Tehran and expressed skepticism about the durability and enforceability of any negotiated settlement.

According to the report, Israeli officials were surprised by Washington’s decision to move toward a diplomatic framework with Iran after months of military confrontation and coordinated efforts to contain Tehran’s regional influence.

During a series of conversations, Netanyahu questioned whether Iran could be trusted to adhere to any agreement and warned against easing pressure on its leadership. Trump, meanwhile, focused increasingly on preventing a broader regional war and minimizing the economic consequences of continued conflict, particularly disruptions to energy markets and maritime trade.

Differences between the two leaders also extended to Lebanon, where Trump reportedly objected to Israeli military operations that could jeopardize ongoing ceasefire initiatives.

The Washington Post reported that exchanges between the leaders became increasingly strained as Trump challenged the strategic value of certain military actions and urged greater restraint in order to preserve diplomatic momentum.

The tensions mark a significant departure from the close alignment that characterized much of the conflict. Throughout the war, Netanyahu had advocated a more aggressive approach toward Iran, presenting intelligence assessments and military proposals while encouraging stronger U.S. involvement.

Trump initially supported many of those objectives and maintained close oversight of developments on the battlefield. However, the report said he later rejected options that could have expanded direct American involvement or prolonged the conflict.

The evolving relationship reflects broader debates within Washington over how best to balance military deterrence with diplomatic engagement in the Middle East.

According to the report, Trump increasingly sought alternative assessments from advisers after discussions with Netanyahu, while some officials within the administration questioned whether domestic political considerations in Israel were influencing decisions related to military operations and regional diplomacy.

Despite the disagreements, the United States and Israel continue to maintain extensive security cooperation. Military coordination between the two countries reportedly expanded significantly during the conflict, with officials describing the level of operational collaboration as unprecedented.

Netanyahu has cultivated a close working relationship with Trump over the past year through frequent visits, regular consultations and public displays of solidarity. However, the latest differences suggest that diverging priorities over Iran, Lebanon and regional stabilization efforts are placing new strains on one of the Middle East’s most consequential strategic partnerships.

The reported disputes come at a critical moment as negotiators seek to transform the U.S.-Iran ceasefire arrangement into a broader settlement while international actors push for a durable ceasefire in Lebanon and greater regional stability.

The discussions come a day after Washington and Tehran signed an interim agreement that commits participating parties to respect Lebanon’s sovereignty and territorial integrity, a provision that could complicate Israel’s efforts to preserve a military presence in areas it has seized during recent operations.

Two Israeli officials, including a senior official close to Netanyahu, told Reuters that Israel is seeking U.S. acceptance of its continued troop deployment south of Lebanon’s Litani River, a strategically important area that Israeli leaders regard as essential to national security.

The senior official said Israel was conducting “stubborn negotiations” with Washington and would not retreat from its core position that troops should remain deployed in southern Lebanon despite mounting international pressure.

A second Israeli official said the outcome could ultimately depend on whether Trump chooses to exert direct pressure on Israel by linking compliance with the broader U.S.-Iran diplomatic framework to future bilateral cooperation.

Netanyahu’s office did not immediately respond to requests for comment.

Israel expanded military operations in southern Lebanon after Hezbollah launched attacks against Israeli territory on March 2 in support of Iran following the outbreak of hostilities involving Tehran and its regional allies. Israeli forces subsequently carried out a large-scale air and ground campaign aimed at degrading Hezbollah’s military infrastructure.

Israeli officials have described territory captured in Lebanon, Gaza and Syria as part of a network of “buffer zones” designed to provide strategic depth and reduce security threats along Israel’s borders. Netanyahu has consistently rejected calls for withdrawal from those areas, arguing that they are necessary to prevent future attacks.

The dispute over Lebanon has become one of the most visible points of friction between Trump and Netanyahu despite their close cooperation during the conflict with Iran.

Speaking at the conclusion of the G7 summit in France on Wednesday, Trump publicly urged the Israeli leader to exercise greater restraint in Lebanon and suggested that military actions should be calibrated to support diplomatic efforts rather than undermine them.

“Netanyahu happens to be a good man, gets a little excited sometimes,” Trump told reporters.

The U.S. president added that Israel could adopt a “softer touch” in dealing with Hezbollah and questioned the necessity of extensive military strikes in response to every perceived threat.

“We have a little dispute over Lebanon. I say you can do a little softer touch, Bibi,” Trump said, referring to Netanyahu by his nickname.

The disagreement reflects broader tensions surrounding efforts to convert the U.S.-Iran interim agreement into a permanent settlement. Iran has repeatedly argued that any durable regional arrangement must include an end to hostilities in Lebanon and a withdrawal of Israeli forces from occupied areas.

Netanyahu has maintained that Israel is not bound by agreements negotiated between Washington and Tehran and retains full freedom of action against Hezbollah.

Despite the public disagreements, Trump acknowledged Netanyahu’s role during the conflict with Iran and praised the close military coordination between the United States and Israel throughout the campaign.

Trump also rejected reports suggesting that Washington had excluded Israel from discussions surrounding the interim agreement, stating that he had personally shared the memorandum of understanding reached with Iran. The framework is expected to serve as the basis for broader U.S.-Iran negotiations scheduled to begin in Switzerland on Friday.

The talks over Lebanon underscore the challenge facing both governments as they attempt to balance military objectives, regional diplomacy and competing visions for post-conflict security arrangements across the Middle East.

Speaking during his weekly general audience in St. Peter’s Square at the Vatican, the pontiff praised the agreement reached earlier this week between Washington and Tehran and expressed gratitude to those involved in the negotiations.

“I hope that this agreement will contribute to strengthening mutual trust, security, and stability in the Middle East by promoting paths of dialogue and cooperation between peoples,” Leo said.

The remarks marked one of the pope’s most direct endorsements of a major diplomatic breakthrough since taking office. His comments underscored the Vatican’s longstanding support for negotiated solutions to international conflicts and efforts aimed at reducing regional tensions.

Leo, 70, framed the accord as evidence that sustained engagement between adversaries can yield tangible results, emphasizing dialogue as a tool for advancing peace and stability.

Turning to the war in Ukraine, the pope said he continued to receive “painful” news from the conflict and appealed for renewed diplomatic initiatives capable of producing a just and enduring settlement.

Russia’s invasion of Ukraine, now in its fifth year, remains Europe’s deadliest conflict since World War Two and has resulted in widespread destruction, heavy casualties, and extensive damage to civilian infrastructure.

“So many innocent victims, rescuers killed, churches and cultural heritage sites devastated by flames,” Leo said during the audience.

The pontiff also expressed solidarity with those affected by the conflict, including families mourning lost relatives, those injured in attacks, and humanitarian workers operating in dangerous conditions.

“I am close to those mourning their loved ones, to the injured, and to those who, amidst the violence, continue to serve life with courage,” he said.

The Vatican has consistently advocated diplomatic engagement in both Middle Eastern and European conflicts, with Leo’s latest remarks reinforcing the Holy See’s emphasis on dialogue, negotiation, and international cooperation as pathways to peace.

Speaking to a delegation of Maronite bishops from the Lebanese diaspora, Aoun said Beirut had received assurances that developments surrounding the U.S.-Iran agreement would not dictate the course of negotiations involving Lebanon.

“We are certainly in favor of a ceasefire and welcome the efforts of any country that helps achieve it, including Iran,” Aoun said, according to remarks released by the Lebanese Presidency.

His comments came amid heightened regional diplomacy following the announcement of an interim agreement between Washington and Tehran aimed at ending months of conflict and creating a framework for broader negotiations.

Aoun emphasized that Lebanon’s leadership retains full authority over any discussions affecting the country and rejected suggestions that external actors could negotiate on its behalf.

“The negotiation is being conducted by the Lebanese state, which is sovereign in its decisions, and no one takes its place,” he said.

The president added that any future settlement involving Lebanon would be reached through the country’s legitimate institutions and would not come at the expense of Lebanese national interests.

His remarks appear intended to reassure domestic audiences amid growing speculation that regional diplomatic arrangements could influence parallel discussions concerning hostilities along the Lebanon-Israel border.

The issue has gained urgency as international efforts intensify to secure a broader regional de-escalation. Earlier on Wednesday, leaders of the Group of Seven nations called for an immediate ceasefire in Lebanon while welcoming the U.S.-Iran agreement and supporting further negotiations aimed at reducing tensions across the Middle East.

Lebanon has remained a central focus of diplomatic efforts following months of conflict involving Israel and Hezbollah, with international mediators seeking pathways toward a durable ceasefire and broader regional stability.

Aoun’s statement underscores Beirut’s position that while it welcomes external assistance and diplomatic support, decisions regarding negotiations and potential settlements remain exclusively within the authority of the Lebanese state.

According to officials and analysts cited in a Reuters report, Iranian authorities are now attempting to manage heightened political and social tensions following the end of hostilities, with a memorandum expected to be signed later this week outlining an interim arrangement between Tehran and Washington.

The report said hard-line factions within Iran, including elements of the Revolutionary Guards and allied political groups, view the outcome of the confrontation as a strategic success and are pushing for continued military strengthening and a firm negotiating position in any future talks with the United States.

At the same time, Iranian citizens are described as facing severe economic hardship, including high inflation, currency depreciation and unemployment, with widespread expectations that any sanctions relief or access to frozen assets will be directed toward improving living standards and rebuilding infrastructure damaged during the conflict.

Hamidreza Azizi, a visiting fellow at the German Institute for International and Security Affairs, said the end of the war could intensify domestic challenges for the clerical leadership, noting that public expectations for economic improvement may rise sharply as military tensions ease.

Reuters also cited Iranian officials as saying that any financial relief under the interim arrangement would likely be allocated to economic stabilisation measures, including support for banking liquidity and reconstruction, while acknowledging risks of renewed public unrest if conditions do not improve.

The report said Iran’s leadership is aware of the potential for renewed protests, recalling previous large-scale demonstrations in 2022–2023, and that authorities have historically relied on strict security measures to suppress dissent during periods of instability.

Saeed Laylaz, an Iranian economist and political analyst, said Iran faces a limited window to stabilise internal conditions, while noting that broader sanctions relief tied to long-term economic recovery would depend on a more comprehensive agreement with the United States.

The report added that divisions within Iran’s political establishment persist over the direction of post-war policy, with some factions prioritising economic recovery and others advocating for continued confrontation and military expansion.

Analysts also noted that tensions between reformist and hard-line elements may shape the government’s ability to manage expectations, particularly as debates continue over Iran’s foreign policy direction and internal governance following the conflict.

Saudi Arabia welcomed the agreement between Washington and Tehran to halt military operations and begin negotiations over a 60-day period aimed at reaching a permanent settlement.

Kuwait also welcomed the deal, which includes an immediate cessation of military operations and guarantees freedom of navigation through the Strait of Hormuz, a key global energy route.

Kuwait praised mediation efforts by Pakistan and Qatar, along with other countries involved in facilitating the agreement, and called for disputes to be addressed through dialogue, mutual respect and non-interference.

Qatar said the agreement could help bring a lasting end to military operations and reaffirmed its support for diplomacy as the preferred method of resolving conflicts.

Egypt and Lebanon also welcomed the development, saying it could help reduce regional tensions and create momentum for broader negotiations.

Egypt described the agreement as an important step toward restoring regional and international stability and said it hoped the end of the conflict would support wider diplomatic efforts in the Middle East.

Lebanon’s Parliament Speaker Nabih Berri said the agreement could contribute to regional security and stability, while praising mediation efforts by Pakistan, Qatar, Saudi Arabia and Egypt.

Türkiye also described the deal as a significant development that could strengthen peace and stability across the region.

The Gulf Cooperation Council welcomed the signing of the memorandum and expressed hope that it would lead to a lasting agreement and greater regional security.

Jordan said the start of negotiations toward a permanent settlement was an important step for restoring regional and international security.

The United States and Iran announced the agreement after more than three months of conflict. US President Donald Trump said he had authorized an end to the US naval blockade of Iranian ports in the Strait of Hormuz.

Details of the agreement were not immediately released, while further negotiations, including discussions related to Iran’s nuclear program, are expected to continue.

The limited movement highlighted continued caution among shipping companies, which welcomed the agreement but are awaiting further details, including safety measures and possible mine clearance operations in the strait.

Global oil prices fell about 4 percent on Monday as markets reacted to expectations that the United States and Iran would formally sign a memorandum of understanding in Switzerland outlining steps to resume shipping.The Strait of Hormuz, a vital route for global energy supplies, has seen sharply reduced traffic since the conflict between the United States, Israel and Iran began on February 28.

The LNG tanker Disha, carrying a cargo from Qatar’s Ras Laffan, had remained west of the strait before crossing, according to data from Kpler and LSEG. The shipment is expected to be delivered to India’s Dahej terminal, a source familiar with the matter said.

Shiptracking data showed about 155 oil and chemical tankers were in the Middle East Gulf area on June 15, down from 201 at the end of May.Shipping analysts said confidence would likely return gradually as vessels resume regular movements through the waterway.

Anoop Singh, global head of shipping research at Oil Brokerage, said wider shipping activity would need time to recover and freight rates could remain elevated while operators assess risks.The Japanese Shipowners’ Association said it welcomed the agreement but wanted more concrete information before recommending that vessels return to normal operations.

Japanese shipping companies also said they would only resume navigation after safety conditions were fully confirmed.The Strait of Hormuz handles a significant share of global oil and LNG shipments, making its reopening a key factor for energy markets and international trade.

Officials said Lebanon had not been informed of the details or timeline of the agreement, which includes a call for military operations to end across multiple fronts.

An official source said Lebanon was not aware of the specific terms of the ceasefire arrangement, while few details of the deal had been made public.

The conflict’s spillover into Lebanon has caused widespread displacement, with around 1.2 million people forced from their homes during the Israeli offensive against Hezbollah.

Municipal authorities in southern Lebanon urged residents to postpone returns, citing continued uncertainty over security conditions. Israel has said it will not withdraw troops from parts of southern Lebanon.

Israeli Defense Minister Israel Katz said Israel would maintain security zones in southern Lebanon, Gaza and Syria, and warned that Israel would respond to any attacks linked to Iran.

Lebanon’s conflict escalated after Hezbollah began attacks against Israel in support of Tehran, drawing a major military response and causing extensive damage in southern areas.

The US-Iran agreement was announced after more than three months of conflict. Pakistan’s Prime Minister Shehbaz Sharif, a mediator between Washington and Tehran, said the deal called for an immediate and permanent end to military operations on all fronts, including Lebanon.

In southern Lebanon, displaced residents expressed caution about returning. Some said they feared security conditions remained uncertain despite the diplomatic breakthrough.

The agreement’s implementation and further negotiations are expected to determine whether displaced communities can safely return to their homes.

Guterres said the deal, which includes a permanent ceasefire and the reopening of the Strait of Hormuz, could help build momentum toward a broader and lasting resolution between the parties.

He urged all sides to “redouble their efforts” to achieve a comprehensive settlement, adding that the United Nations stands ready to support implementation of any future agreements.

The UN chief also expressed appreciation for the role played by several regional actors, including Pakistan, Qatar, Egypt, Saudi Arabia and Türkiye, saying their involvement was “constructive” in facilitating negotiations.

The statement came as global reactions to the agreement continued, with European leaders indicating readiness to lift sanctions on Iran in response to progress on its nuclear program, while emphasizing that Tehran must not obtain a nuclear weapon.

A joint statement by European countries including the United Kingdom, France, Germany and Italy said they were prepared to coordinate with the United States, Iran and the International Atomic Energy Agency on verification measures linked to the deal.

Japan also welcomed the agreement, with Prime Minister Sanae Takaichi expressing hope for its steady implementation and calling for guaranteed free and safe navigation through the Strait of Hormuz.

The Strait, a key global energy shipping route, is expected to reopen under the terms of the ceasefire, marking a significant development in regional maritime security and global oil flows.