Top US and Iranian officials convened in Pakistan's capital on Saturday for negotiations aimed at ending a six-week war that has killed thousands, disrupted global energy supplies and weighed heavily on the world economy.
While both sides have expressed a desire for de-escalation, significant gaps remain on core issues. Tehran has insisted that formal talks can only begin after Washington provides firm commitments on a ceasefire in Lebanon and the lifting of long-standing sanctions.
Here are the main talking points expected to dominate the negotiations:
Ceasefire in Lebanon
Iran is demanding an immediate ceasefire in Lebanon, where Israeli military operations against Iran-backed Hezbollah fighters have killed nearly 2,000 people since fighting escalated in March. Tehran insists that any broader Iran-US truce must include an end to hostilities in Lebanon.
The United States and Israel, however, maintain that the Lebanon campaign falls outside the scope of the current ceasefire framework, creating an early point of contention.
Sanctions relief and frozen assets
A central Iranian demand is the unblocking of frozen Iranian assets and the removal of economic sanctions that have severely constrained its economy for years. Iranian officials have described sanctions relief as a prerequisite for meaningful progress.
Washington has signalled openness to significant sanctions relief, but only in exchange for verifiable concessions from Tehran on its nuclear programme and ballistic missile development.
Control of the Strait of Hormuz
Iran is seeking formal acknowledgement of its authority over the Strait of Hormuz, a critical global energy chokepoint. Tehran aims to collect transit fees and regulate maritime access, a move that would represent a major shift in regional power dynamics.
The United States insists the strait must remain open to all international shipping without restrictions, tolls or unilateral controls. The waterway has been partially blockaded during the conflict, contributing to the sharpest disruption in global energy supplies in decades.
Compensation for war damage
Iran is expected to demand compensation for infrastructure and economic damage incurred during the six-week conflict. Iranian state media have cited statements from the country's new Supreme Leader indicating that reparations will be a key part of Tehran's negotiating position.
The US delegation has not publicly commented on this demand.
Uranium enrichment
Tehran wants recognition of its right to enrich uranium for civilian purposes. Iran currently holds a stockpile of more than 400 kg of uranium enriched to near weapons-grade levels.
President Donald Trump has described uranium enrichment by Iran as non-negotiable and has ruled out any agreement that permits it.
Missile capabilities
Both the United States and Israel are pressing for dramatic curbs on Iran's ballistic missile arsenal, which they view as a primary threat to regional stability.
Iranian officials have repeatedly stated that their missile programme is non-negotiable and forms an essential part of the country's defensive strategy.
US military presence and regional security
Iran is calling for the withdrawal of US combat forces from the Middle East, a cessation of hostilities on all fronts, and a formal commitment to non-aggression from Washington.
President Trump has vowed to maintain US military assets in the region until a comprehensive peace deal is secured, warning of "major escalation" should negotiations fail.
Stakes and outlook
The talks in Islamabad represent the highest-level direct engagement between Washington and Tehran since the 1979 Islamic Revolution. A two-week conditional ceasefire announced earlier this week has halted airstrikes but has not resolved underlying tensions or reopened the Strait of Hormuz to normal traffic.
Analysts caution that the wide gap between the two sides' positions on core issues could make rapid breakthroughs unlikely. However, the mere fact of face-to-face negotiations has raised cautious hope that a path to de-escalation may yet emerge.
As discussions proceed under tight security in Islamabad, the world watches to see whether diplomacy can achieve what military pressure has not: a durable end to a conflict that has shaken the Middle East and reverberated across the global economy.