World leaders express optimism for peace deal

Israel won’t withdraw from the land it seized in southern Lebanon, Defense Minister Israel Katz said on Monday.

Katz’s remarks were the first official Israeli comments after the United States and Iran announced a preliminary peace deal overnight that is set to be signed on Friday.

Iran has tied the deal to a cessation of Israeli strikes against Hezbollah in Lebanon, although the exact terms have not been announced.

However, in his remarks on Monday, Katz said that if Iran attacked Israel due to its actions in Lebanon, then Israel would retaliate by striking Iran with “great force.”

The detailed terms of the agreement, set to be signed in Switzerland on Friday, have yet to be made public. Here’s what we know so far:

• The Strait of Hormuz would reopen after the deal is signed on Friday, according to Trump. Tehran reiterated that timeline.
• A more expansive agreement is to be negotiated during a 60-day ceasefire period.
• The 60-day period would address Iran’s nuclear program.
• Iranian sanctions relief would also be negotiated.
• Pakistan, which announced the deal, has insisted it includes Lebanon. Israel, which has maintained its fight against Hezbollah, has yet to comment.
• On Saturday, Trump had implied the deal would not include Iran handing over its enriched uranium. This had been a key condition of Israel, which was not party to the talks.

On Monday, the European Union’s high representative for foreign affairs, Kaja Kallas, welcomed the preliminary deal between the US and Iran to end the war.

“This marks a potential breakthrough,” Kallas wrote on X. “It can give much needed space for deeper negotiations on Iran’s nuclear program and other critical issues. Once implemented, the deal should also ease the global energy crisis.”

Kallas said she had spoken with her Iranian and Gulf counterparts in recent days. She added that EU Foreign Ministers meeting later on Monday will discuss how the bloc can be closely involved in the coming phase.

“From economic leverage to nuclear expertise and longstanding relationships with Gulf partners, the EU stands ready to contribute to a sustainable resolution,” Kallas said.

Oil prices fell and shares rallied on Monday after Washington and Tehran announced a tentative peace deal that would see the Strait of Hormuz reopened.

Brent crude oil — the international standard — fell over 4% to $83.82 per barrel in early trading.

“Ships of the world, start your engines. Let the oil flow!” Trump posted on his Truth Social platform.

Stock markets also reacted positively to the news. In Asia, Japan’s Nikkei and South Korea’s KOSPI each gained more than 5%. On Wall Street, futures for the S&P 500 were up 1% and for the Dow Jones Industrial Average up 0.9%, pointing to likely early gains.

But it could still take months for oil prices to stabilize, while shipping and insurance companies will also want to be confident that this latest ceasefire announcement will hold.

“Markets are likely to be cautious in not over-extending optimism as they watch for an actual resumption of traffic across Hormuz,” analysts from Japan’s Mizuho Bank said in a commentary.

Meanwhile, as Europe woke up on Monday, European Central Bank President Christine Lagarde ⁠told ⁠France Culture radio ​that the ceasefire agreement reached ​with Iran ​was “good ‌news.”

Good morning and welcome to DW’s coverage of the Iran war as we follow the announcement of a peace deal between the United States and Iran.

On Monday, the EU’s foreign policy chief, Kaja Kallas, hailed the “potential breakthrough.” She said she hoped that it would help with the global energy crisis.

Oil prices fell immediately after the announcement, but analysts believe it will take months for prices to truly stabilize if this latest announcement holds.