Indirect negotiations between Iran and the U.S. over a draft memorandum of understanding have stalled, returning the diplomatic process to its initial stage.
The breakdown in talks threatens to derail efforts to stabilize relations between Tehran and Washington, as the two governments remain deadlocked over financial guarantees.
According to reports from May 21, 2026 [2], the dispute centers on the immediate release of approximately $12 billion [1] in frozen Iranian funds. Tehran has accused Washington of volatility and a lack of seriousness, saying the U.S. has attempted to modify terms that had previously been agreed upon.
Washington has refused to provide the funds in advance. Instead, the U.S. has proposed alternative arrangements, such as transferring the money to a third country to ensure the funds are not misused.
These indirect talks are reportedly being conducted with mediation led by Pakistan [1]. The current impasse reflects a deeper mistrust regarding the sequencing of the agreement, specifically whether the funds should be released before or after other diplomatic milestones are met.
Tehran maintains that the immediate release of the $12 billion [1] is a prerequisite for further progress. The U.S. position continues to prioritize a mechanism that prevents the direct transfer of assets until specific conditions are verified.
“Indirect negotiations between Iran and the U.S. over a draft memorandum of understanding have stalled.”
The return to the 'initial stage' of negotiations indicates that the core friction between the U.S. and Iran remains the lack of mutual trust. By disagreeing on the custody and timing of the $12 billion in frozen assets, both nations are signaling that they are unwilling to take the first financial or political risk, leaving the mediation efforts by Pakistan in a precarious position.
