Special Coverage: US and Iran Agree to Ceasefire Hours Before Trump Deadline

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1:40Bloomberg Audio Studios, podcasts, radio, news. This is a breaking news update from Bloomberg. Instant reaction and analysis from our 3 ,000 journalists and analysts around the world. From Bloomberg World's headquarters in New York, I'm Doug Krizner. The U.S. and Iran have agreed to a two-week ceasefire. It's expected to halt the American-Israeli military campaign in exchange for Tehran opening the Strait of Hormuz. And needless to say, this deal will buy time for the two sides to reach a more permanent agreement to end the war. This conflict has already killed thousands of people and sparked a global energy crisis.

2:22Let's go to Washington and bring in Bloomberg's Eric Martin, one of our reporters for Bloomberg News. Eric, thank you so much. I know that it's been a busy evening for you. Give me a sense of how or the role that Pakistan played in bringing us to this point in time. Sure. Well, we have seen over the last several weeks Pakistan taking the leading role in passing messages between Iran and the Trump administration. A couple of weeks ago, we confirmed that Pakistan had shared a 15-point proposal from the Trump administration with Iran. And we saw this afternoon the strongest indication, the first indication we got that this would be a night when diplomacy would notch an apparent, at least short-term victory.

3:13and the kind of strikes that President Trump had threatened was when we saw Pakistani Prime Minister Shabazz Sharif this afternoon posting on X on social media about the Pakistani plea to the U.S., request to the U.S. to hold off for two weeks on the attack to agree to a two-week ceasefire in exchange for Iran opening the strait. And so that was kind of mid-afternoon today, And that really set the tone for a complete 180 from what we had seen coming into the day, which was President Trump over the last 48 hours repeatedly threatening, including using curse words on Sunday to really rain down fire on Iran this morning, starting a day with his tweet about killing a civilization.

4:08And so it's been quite a roller coaster in the last 12 hours or so here. No doubt about that. And from the Iranian side, indications that there will be safe passage for vessels traveling through the Strait of Hormuz. That will be possible for a two week period. Is that right? That's what we have seen thus far from the Iranian side. And we have also started to see some reporting coming out, CNN reporting that Special Envoy Steve Witkoff, Vice President Vance, and President Trump's son-in-law, Jared Kushner, are expected to attend talks with Iran on Friday in Islamabad. So things moving quickly here, moving from the news of this ceasefire to the next step, which is trying to reach a comprehensive agreement in discussions, negotiations between the U.S.

5:01and Iran. Speaking with Bloomberg's Eric Martin, I want to bring in Daniel Byman. He is director of the Warfare, Irregular Threats and Terrorism Program at the Center for Strategic and International Studies. Daniel, thank you so much for being with us to share your perspective. Did this strike you at all in a surprising way that we would see essentially a dramatic climb down from some of the bellicose rhetoric that we had been hearing earlier? President Trump was clearly moving towards a decision moment. And today it was either going to be significant escalation or some sort of deal. and he can now claim that it was his threats that led the Iranians to the negotiating table.

5:47It's quite possible he could have gotten this deal several weeks ago, so I'm not quite sure that's right. But this possibility has been out there. It's not a comprehensive deal. It doesn't get all of what the United States wants or even close. And the same on the Iranian side. So both sides, I think, are hurting enough where they're willing to at least accept a temporary deal where perhaps several weeks ago they might not have. So according to the president tonight, the administration has received a 10-point proposal from the Iranian side. Trump called it workable, kind of the basis for negotiations.

6:21What would you imagine Iran wants as a part of this negotiation? So Iran is claiming fairly ambitious things as part of this 10-point proposal. Some of it is, of course, a permanent ceasefire, right? So no renewal of war, and that applies not just to Iran, but to Lebanon and Yemen. But also lifting of both primary and secondary sanctions that the U.S. has imposed, unfreezing assets, allowing Iran nuclear enrichment, while at the same time Iran maintains its position that would not seek a nuclear weapon, but it would still have a nuclear program. So what Iran wants is proposing in the past has not been acceptable to different U.S.

7:07administrations, but it's a beginning negotiating point. So it's quite possible that the final result will be somewhere in between, or frankly, that there might not even be a final result. It might just be a ceasefire that's indefinitely extended rather than a more permanent deal. Daniel Blyman from CSIS, back to Bloomberg's Eric Martin. Eric, We're getting indications from CNN that Steve Witkoff, along with Vice President J.D. Vance and Jared Kushner, the president's son-in-law, are expected to attend the first round of talks in Islamabad on Friday. Do you expect this to be wrapped up within this two-week period that they're calling a ceasefire?

7:46Well, there certainly seems on the surface to be a lot that they need to get agreement on in two weeks. Some of the previous U.S. demands objectives of the war in terms of decimating Iran, its missile program, getting Iran to stop support for proxies, getting Iran to agree to give up not only nuclear weapons ambitions but potential nuclear material as well, and to reopen the strait. All of these have been things that they've been at loggerheads in recent days, at least publicly. So it would seem if there is a lot that they need to get done in those two weeks, hence the need to the urgency in getting the two sides to sit down already in just a couple of days from now in Pakistan, apparently.

8:33Back to Daniel Byman from CSIS. Daniel, we were learning from the Iranian side that as long as there is no longer military campaigning from the Americans and the Israelis on Iran, that the Strait of Hormuz will be open and free for travel for cargo vessels, notably those tankers that carry crude oil. Is there something here that you believe needs to be caveated or is this going to be kind of a durable ceasefire, do you think? Or is there still some level of risk that we need to be aware of? There are certainly some level of risk, though I should stress this ceasefire is is good news. But Iran has shown that it can close the straits.

9:22And this Iran hopes will be a deterrent against both U.S. and also Israeli attacks. And one thing to remember here is, of course, there's more than just the United States and Iran. And Israel has said it will go along with the ceasefire, but Israel has its own interests. And it's quite possible, especially now that Iran's air defenses are destroyed, that Israel might do a future attack. And that could lead to the unraveling or at least short-term unraveling of any ceasefire arrangement. So to what extent will the Israelis have influence over these talks that will be happening in Pakistan? The Israelis are listened to very carefully by the Trump administration.

10:04And certainly many of their views on Iran's nuclear program and the terrorist groups that Iran supports, those are also shared in Washington. So there is a fair amount of common agreement. But that said, there may be differences in terms of how much risk the two countries are willing to take with regard to Iran's nuclear enrichment. There may also be differences with regard to verification for things like support to Iranian proxies. So you could imagine a thousand different details where there might be a disagreement. But Israel has weakened Iran significantly in this conflict. And I think Israeli leaders are looking at this and saying this has been a major success.

10:46And as a result, I think they recognized that this war was going to end sometime. And the current arrangement may be the best they can realistically hope for. So to what extent, though, when you look at the situation that exists with Egypt and Turkey that have been also involved with Pakistan in trying to get talks moving forward towards some type of negotiated settlement, do you expect those parties also to be a part of what gets worked out? Absolutely. And these parties have influence. Egypt has some influence with Israel. They've worked closely together on a number of things, including Gaza.

11:26But both of them have tried to work with the Trump administration. And they recognize that the destabilization of the Middle East is strongly not in their interest and are pushing towards resolution of this. And both are going to try to make a continued pitch for diplomacy, which, along with Pakistan, they have had some success. It's been a difficult road, but you do have to recognize that many of these countries deserve credit for bringing the two parties closer. One of the aims, though, if I'm correct in this, was regime change, and it's not clear that that's occurred. I would say certainly regime change has not occurred.

12:02It is obviously different leaders because Israel and the United States have killed many of them. But the same regime, the same power system is in place in Iran. This was a goal that President Trump himself articulated. But he also articulated numerous other goals. Figures like Secretary of State Rubio articulated different goals. So the United States, one of the criticisms I have is the United States has been really all over the map in what it's trying to achieve. So if you take minimal U.S. objectives, some have been achieved. But if you look at more maximal ones, especially regime change, it's nowhere close.

12:39Daniel, thank you so much for joining us and sharing your perspective. Daniel Byman is director of the Warfare, Irregular Threats, and Terrorism Program at the Center for Strategic and International Studies. Our thanks, too, to Bloomberg's Eric Martin, our reporter in Washington, D.C. Let's get to Bloomberg's Christina Ruffini. She is co-host of Bloomberg This Weekend. Thank you for making time. I think it's your day off. Yeah, right? But there's never a day off, is there, when you're in the news business? And when in diplomacy, I was literally just WhatsAppping before we came on with a Middle Eastern source.

13:13And I said the same thing. It's my day off. I'm about to go on. And they said, we don't have days off anymore. So we're all in it together and we're just trying to figure out what's going on. So based on what you were reading in the news flow today, is this really a surprise that there have been there's been this kind of 11th hour temporary solution? I don't think so. I think the tea leaves were just not really there. But you never know with this administration, and it's such a small group of people making these decisions. As I said before, they can pivot on a dime. So even what sources are telling you can be right up until the minute the president changes his mind.

13:45The thing is, I think the president really did need an off-ramp. Sources have told me it's unclear how real this Pakistani moderation is. But it's real enough that it allowed the president a way to get out of these highly charged threats he's been making over the weekend. I mean, we saw that profanity laced tweet came out while we were on the air on Sunday. And I got to tell you, we were reading another tweet from the president and I scrolled up and saw that. And I was afraid to read it on air because I thought, oh, gosh, am I on a wrong Web site? Is this a fake truth social? And it wasn't until it came through the terminal that we then realized, no, that was actually what the president had said.

14:24So a lot of relief throughout the Middle East tonight, a lot of relief on this side of the ocean. Speaking with Bloomberg's Christina Ruffini, co-host of Bloomberg This Weekend, about our top story, President Trump tonight postponing his threat to attack civilian infrastructure across Iran for two weeks as negotiators inch closer to a ceasefire deal. The deadline had been 8 p.m. Eastern Time, but around 325 this afternoon, we learned that Pakistan asked the president for a two-week extension. And this evening, President Trump said he accepted that request. The Iranians, according to the New York Times, have agreed to this ceasefire.

15:05And Iran tonight saying that safe passage through the Strait of Hormuz is possible for this two-week period. We're seeing crude oil prices simply collapse right now. I want to bring in Terry Haynes from Pangea Policy. Terry, thanks for making time. It's a busy night. Let me get your reaction. Good evening, Doug. My reaction is that, as Churchill once put it, jaw-jaw is better than war-war. So the fact that the two sides continue to jaw is a good thing. I heard enough of Christina's point to agree that there are lots and lots of loose ends here and tentative agreements for a ceasefire without a complete agreement on anything.

15:55Thirdly, just for markets, I would urge that this looks much more like a brief step back than any kind of directional. I think you can't assume that the direction of travel here is inexorably towards peace, and people want to believe that. They hope it's true, of course, and they will expect that a move in this direction is a move towards that. I'd urge a lot of caution on that front because we frankly don't know enough about what the basis of the 10-point plan is, whether it covers a broad swath of diplomatic issues that the United States wants, whether it's a very narrow set of issues like Iran wants, or exactly what's in it.

16:47But the fact that we've got a little breathing room here is, generally speaking, a good thing. Terry, give me a sense of what President Trump has been facing in terms of domestic pressure to try to dial down the severity of what's been happening, even beyond the rhetorical side, and arrive at some sort of deal. Well, Doug, I think what's been going on from the Trump side is, you know, looking through all the smoke and mirrors, you know, kind of the fog of war stuff that goes on. And I don't mean to minimize any of it because some of it, you know, the blown back into the Stone Age sorts of things or end the civilization or, you know, quite consequential and serious statements.

17:31But I think – but I do think diversionary. Yeah, the war is not popular for a lot of reasons. Republicans to date have tended to back Trump for the short term, more or less uncritically. Democrats decided within hours of the beginning of hostilities that it would oppose. And you see that political split among elected leaders mirrored in the public by and large. but the public does support, I think, on a bipartisan basis, and a quite large one, the core goals of removing Iran's ability to have a nuclear weapon. I think that needs to be understood. So as long as the president remains, the actual policy, the actual steps to get to a resolution, remain laser-focused on that goal, that set of goals, the public, I think, will continue to support.

18:40If the administration starts dissipating, I think, and becomes less clear about its objectives, then I think what you have is a situation where opposition in the country rises fairly quickly, and congressional opposition rises fairly quickly. Let's remember that the war powers resolution idea kicks in again at a minimum of 60 days, so we're coming up on that by the end of the month. So there's a lot of pressure, both domestically in terms of how people feel about the war and the levers available to Congress to direct some sort of conclusion. There's a real set of pressures on the White House to try to conclude something within the next three weeks or so.

19:35Speaking with Terry Haynes of Pangea Policy, we'll get back to Christina Ruffini now. She is co-host of Bloomberg this weekend. So Christina, as I mentioned, according to Axios, we'll have the first round of negotiations happening Friday in Islamabad. And we are learning from CNN tonight that Israel has agreed to suspend bombing during these negotiations, I would imagine, during this two-week interregnum period. How closely aligned are the U.S. and Israel when it comes to the objectives here for some sort of deal? And would you expect Israel to play any role in these negotiations? I don't think they can on the face.

20:15I mean, obviously, the Prime Minister Benjamin Netanyahu is very influential in the White House. And depending on what reporting you're reading, likely had a big influence in convincing President Trump to launch this attack in the first place. It's been something he has wanted for decades. And he has waited for the correct American president to be in place to convince the U.S. to take this action that the dangers Iran pose, not just to Israel, but to the region at large. The presence of Israel publicly in these talks would be a poison pill. That would not be something Iran could allow just on the face of it.

20:49That would not be something I don't think Pakistan would want either. That's just not going to work. It's not going to be productive. Now, Israel and the U.S., of course, back-channeling will be aligned and will be coordinating. It is significant that Israel has agreed to hold its fire as well for the past, I mean, for these next two weeks, because that ceasefire would not hold. Because diplomatically, if you are Iran, if you are getting these incomings, they are not really distinguishing between the policy of those two countries at this time. So if one were to fire or the other were to fire, the ceasefire would break down completely, because they would assume that any strike Israel took had been made with the approval of the United States, whether or not that was true.

21:31Let's bring in. I'm sorry. Go ahead. No, no, no, no. You finish. I interrupted you. Well, I was going to bring in your friend, Jeff Mason, who is our White House and Washington correspondent. Oh, all right. I guess we can bring in Jeff Mason. Okay. Jeff, what are you hearing from the White House at this hour? Christina doesn't want to share the airtime. That was the problem there. No, I'm just kidding. We love being on together. What am I hearing from the White House? Well, number one, the spokesman for the White House is President Donald Trump. And he made news tonight with his decision to put off this strike or to delay it in any case for two weeks and also to accept a ceasefire from Iran.

22:11So I think the big question marks continue to be whether or not this will lead to a more permanent deal. And he hinted at that in his post by talking about the fact that he said Iran had given a 10-point plan that he spoke somewhat favorably of, and whether or not the next two weeks is enough time for them to agree on that. But certainly if he does get the Strait of Hormuz opened, if Iran follows through on that and opens it up for two weeks, that's a huge, what I think he would probably call a gift to the United States and the rest of the world while they continue these negotiations. Back to Terry Haynes from Pangaea Policy.

22:55Terry, the Iranian parliament passed a, I guess we can call it legislation recently, which essentially applied a toll for vessels passing through the strait. Do you think that's a deal breaker for the Trump administration, that there is no way that any type of fee could be charged for traffic in the strait? Well, in a state like Iran, I think those pieces of legislation aren't going to matter very much. What will matter a great deal is whether or not Iran holds to what appears to be its agreement to open the strait during this two-week period. if Iran keeps to its word on reopening the strait, it has some ability to recover a little bit of world opinion.

23:51But right now what you have is, you know, Iran's done a very good job of making it hard for its allies, China and Russia, to overtly be helpful. There's a variety of ways that's been reported in which they are being more or less covertly helpful, but overtly. You know, Europe is not fully in the situation where it is interested in coming down on the Iranians, nor with the global south. But, you know, Iran has done itself a great disservice with its Gulf neighbors. It can recover a little bit of good opinion if it holds to this deal without complications or strings or invoking the law that you just mentioned, which is quite an appropriate question.

24:45but should it decide it wants to start playing games or favoritism or selectively applying tolls or anything like that that is going to edge closer to being a deal breaker with the united states and israel and is exactly the kind of thing that i'm talking about when we discussed earlier that markets should not take a firm direction of travel here to the bank you know that's a perfect example of something that can gum up the works pretty quickly. Back to Bloomberg's Jeff Mason, our White House and Washington correspondent. So, Jeff, we've got this two-week period now for negotiations between the U.S.

25:22and Iran. How much of this do you think will play out publicly versus kind of behind the scenes? Well, I suspect it'll be a little bit of both. Number one, the president is always pretty public, and he'll be continuing to update people and journalists like me will throw questions at him when we have a chance to. So that public aspect will be present. But I think it's also worth noting that this is going to be the first face-to-face talks that the two sides have had since before the war. So there's a public nature to that as well, even though the media, no doubt, will not be allowed to sit in on those talks.

25:58There may be briefings afterwards or there may be statements with both sides at the beginning or at the end of those talks. So this is completely different from the less formal and more secretive over the phone or over email or over secure line type of communication that has been happening over the last several weeks since the war began.

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