Updated ,first published
US Vice President JD Vance flew into the Pakistani capital Islamabad on Saturday for high-stakes talks aimed at ending the six-week-old war with Iran, despite Tehran’s insistence that negotiations could not begin without commitments on a ceasefire in Lebanon.
As the talks began, Reuters reported that the US had agreed to release frozen Iranian assets held in banks in Qatar and elsewhere. An unnamed Iranian source said the US would release $6 billion in frozen funds.
The US delegation, led by Vance and including President Donald Trump’s special envoy, Steve Witkoff, and son-in-law, Jared Kushner, arrived in Islamabad after a refuelling stop in Paris. The Iranian delegation, led by parliamentary Speaker Mohammad Baqer Ghalibaf and Foreign Minister Abbas Araghchi, arrived on Friday.
Ghalibaf said on X that Washington had previously agreed to unblock Iranian assets and to a ceasefire in Lebanon, where Israeli attacks on Iran-backed Hezbollah militants have killed nearly 2000 people since the start of the fighting in March. He said talks would not start until those pledges were fulfilled.
The Reuters source – who declined to be named due to the sensitivity of the matter – said that unfreezing the assets was “directly linked to ensuring safe passage through Strait of Hormuz”, which is expected to be a key issue in the talks.
The source welcomed the move as a sign of “seriousness” in reaching a deal with the US in talks in Islamabad.
The $6 billion was originally frozen in 2018. It had been due for release in 2023 as part of a US-Iranian prisoner swap, but the release was blocked by then-US president Joe Biden following the Palestinian militant group Hamas’ October 7, 2023 attacks on Israel.
The US has not made any public comments on the matter.
Israel and the US have said the Lebanon conflict is not part of the ceasefire, while Tehran insists it is.
Ghalibaf said separately that Iran was ready to reach a deal if Washington offered what he described as a genuine agreement and granted Iran its rights, Iranian state media reported.
The White House did not immediately comment on the Iranian demands, but Trump posted on social media that the only reason the Iranians were alive was to negotiate a deal.
“The Iranians don’t seem to realise they have no cards, other than a short-term extortion of the World by using International Waterways. The only reason they are alive today is to negotiate!” he said.
Vance, speaking as he headed to Pakistan, said he expected a positive outcome. “If they’re going to try to play us, then they’re going to find the negotiating team is not that receptive,” he said, adding that Trump had given the team “some pretty clear guidelines”.
Preliminary discussions have been separately held by Pakistani officials with advance teams from both sides, sources in Islamabad said.
Iran’s semi-official Tasnim news agency said these included 70 members from Tehran, including technical specialists in economic, security and political fields, as well as media personnel and support staff. About 100 members of an advance US team were in the city, a Pakistani government source said.
“We’re very positive,” said another Pakistani source close to the discussions. Asked if talks would end on Saturday, the source said: “Too early to say. They have instructions to close a deal or walk away. Hence, not in a rush. These talks are not on the clock.”
Islamabad was under an unprecedented lockdown ahead of the talks, with thousands of paramilitary personnel and army troops on the streets.
“We have deployed multi-layer security for this event, which is based on co-ordination, intelligence and constant monitoring for zero disruption and full control,” Pakistan’s junior interior minister, Talal Chaudhry, told Reuters.
In another development, China is preparing to transfer shoulder-fired anti-aircraft missiles known as MANPADs to Iran, CNN reported, citing US intelligence sources it did not name.
The network said there were indications that Beijing was working to route the shipments through third countries to mask their origin. The US State Department, White House and the Chinese embassy in Washington did not immediately respond to Reuters’ requests for comment.
Trump announced a two-week ceasefire in the war on Tuesday, which has halted American and Israeli airstrikes on Iran.
But it has not ended Iran’s blockade of the Strait of Hormuz, which has caused the biggest-ever disruption to global energy supplies, or calmed the parallel war between Israel and Iran-backed Hezbollah in Lebanon.
Fighting continues in Lebanon
The Israeli ambassador to the US, Yechiel Leiter, and his Lebanese counterpart, Nada Hamadeh Moawad, will hold talks in Washington on Tuesday, Israeli and Lebanese officials said, amid conflicting accounts on what those talks would cover.
Lebanon’s presidency said the two had held a phone call on Friday and agreed to discuss announcing a ceasefire and setting a start date for bilateral talks under US mediation. But Israel’s embassy in Washington said the talks would constitute the start of “formal peace negotiations” and that Israel had refused to discuss a ceasefire with Hezbollah.
Israeli attacks continued across southern Lebanon on Friday. One strike on a government building in the city of Nabatieh killed 13 members of Lebanon’s state security forces, President Joseph Aoun said in a statement.
Hezbollah said in a statement on its Telegram channel that it fired rocket salvos at northern Israeli towns in response. Hours after the ceasefire was announced, Israel launched the biggest attack of the war, killing more than 350 people in surprise strikes on heavily populated areas, Lebanese authorities said.
Tehran’s agenda at the talks also includes demands for major new concessions, including the end of sanctions that crippled its economy for years, and acknowledgement of its authority over the Strait of Hormuz, where it aims to collect transit fees and control access in what would amount to a huge shift in regional power.
Hormuz sticking point
Iran’s ships were sailing through the Strait unimpeded on Friday, while those of other countries remained hemmed inside.
Traffic through the strategic waterway has shown little sign of a meaningful pick-up since the truce began, as shipowners await clarification of its status. A Russian-flagged supertanker passed through the strait late Thursday, ship-tracking data show, but that was a rare example.
Disruptions to energy supplies have fuelled inflation and slowed the global economy, with the impact expected to last for months even if negotiators succeed in reopening the Strait.
The ongoing blockage has maintained pressure on oil prices. US crude swung between losses and gains all session as traders unwound positions into the weekend to stay neutral ahead of the talks on Saturday. Prices settled below $US97 ($137) a barrel.
The hard line taken by Iran’s leaders ahead of the negotiations followed a defiant message from its new Supreme Leader, Ayatollah Mojtaba Khamenei, on Thursday.
Khamenei, yet to be seen in public since taking over from his father, who was killed on the war’s first day, said Iran would demand compensation for all wartime damage.
“We will certainly not leave unpunished the criminal aggressors who attacked our country,” he said.
Although Trump has declared victory and degraded Iran’s military capabilities, the war has not achieved many of the aims he set out at the start: to deprive Iran of the ability to strike its neighbours, dismantle its nuclear programme, and make it easier for its people to overthrow their government.
Iran still possesses missiles and drones capable of hitting its neighbours and a stockpile of more than 400 kilograms of uranium enriched near the level needed to make a bomb. Its clerical rulers, who faced a popular uprising just months ago, withstood the onslaught with no sign of organised opposition.
Reuters, Bloomberg
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