Renewed negotiations between the United States and Iran aimed at transforming an initial truce into a durable peace agreement showed early signs of progress during talks held over the weekend in Switzerland. Representatives from both nations, along with mediators from Pakistan and Qatar, described the initial session as “constructive” and expressed optimism about reaching a final deal within 60 days.

The discussions took place at the Bürgencstock Resort near Lake Lucerne, where officials also announced the establishment of two communication channels designed to address persistent challenges: ongoing hostilities in Lebanon despite a cease-fire and obstacles affecting maritime navigation through the Strait of Hormuz. These issues have complicated efforts to maintain stability in the region.

U.S. Vice President JD Vance characterized the first day of talks as productive, stating that the parties had made significant strides toward their objectives. One notable development was Iran’s purported commitment to allow International Atomic Energy Agency (IAEA) nuclear inspectors to return to the country. However, Tehran’s foreign ministry spokesman, Esmail Baghaei, later clarified that Iran had made no new pledges beyond existing protocols governing IAEA access.

In a significant policy shift, the U.S. Treasury temporarily lifted sanctions on Iranian oil imports for a 60-day period, permitting transactions in U.S. dollars. Treasury Secretary Scott Bessent attributed this easing to progress made during the negotiations. The move effectively reinstates certain key components of the 2015 nuclear accord between Iran and world powers, from which the Trump administration withdrew in 2018. President Trump had previously criticized the agreement, calling it “one of the Worst Deals ever.”

Despite initial advances, the talks exhibited signs of volatility. The Iranian delegation, led by Parliament Speaker Mohammad Bagher Ghalibaf, briefly exited the negotiations in response to a social media post by President Trump threatening renewed U.S. military action against Iran if a deal was not finalized. They subsequently rejoined the discussions.

The 60-day negotiation window, outlined in a memorandum agreed upon last week by President Trump and Iran’s president, was designed to resolve outstanding issues left open by the preliminary agreement. These include Iran’s future nuclear capabilities and detailed arrangements for diluting its existing stockpile of near-weapons-grade nuclear material. However, these topics received limited attention during the initial talks.

Rather than focusing primarily on nuclear matters, the delegation prioritized enforcement of the cease-fire between Israel and Hezbollah in Lebanon and ensuring unimpeded shipping through the strategically vital Strait of Hormuz. The cease-fire, brokered last week but not involving Israel—which has actively participated in hostilities alongside the United States—remained tenuous. Both Israel and Hezbollah reportedly continued limited cross-border attacks, even as a fragile cease-fire held on Monday.

Iran’s claim that it closed the Strait of Hormuz in response to Israeli attacks over the weekend was contested by U.S. officials who maintained that maritime traffic remained uninterrupted, despite the waterway’s partial closure earlier in the conflict, which had contributed to spikes in global oil prices.

Qatari and Pakistani mediators confirmed that talks would proceed throughout the week, though observers cautioned against excessive optimism. Carl B. Weinberg, chief economist at High Frequency Economics, described market reactions to the initial U.S.-Iran agreement as premature and speculative, predicting that the dialogue could extend well beyond the 60-day period, potentially lasting until 2029.

Compounding the fragile nature of the process, Vice President Vance canceled a planned return trip to Switzerland after Iran again withdrew over ongoing Israeli attacks in Lebanon, underscoring the challenges ahead as negotiators seek to finalize a comprehensive peace framework.