U.S.-Iran accord hits early snag after Swiss talks fail to proceed as planned

News that the U.S. and Iran had reached an interim deal may have brought some initial relief to markets, but fresh uncertainty emerged on Friday after planned follow-up talks in Switzerland were called off, underscoring the challenges of turning the agreement into a lasting peace settlement.

Switzerland’s foreign ministry said U.S.-Iran talks scheduled to take place at Bürgenstock on Friday would not proceed as planned.

The White House also said that Vice President JD Vance was no longer traveling to Switzerland, citing unresolved logistical issues surrounding the negotiations.

“The plans for the upcoming technical talks have not been finalized, and the U.S. delegation has been prepared to depart at the first available opportunity,” a White House spokesperson said.

“But the logistics of these negotiations have never been simple or predictable.”

The developments came a day after President Donald Trump and Iranian President Masoud Pezeshkian signed a memorandum of understanding aimed at developing a permanent peace deal to end the months-long conflict.

Under the 14-point MOU, both sides agreed to extend the ceasefire, including in Lebanon, and reopen the strategically vital Strait of Hormuz.

The Financial Times, however, reported that Friday’s talks were abruptly called off due to Israel launching a wave of deadly air strikes against Lebanon, citing three people familiar with the matter.

Lebanon’s Health Ministry said 18 people were killed in the south of the country following a series of Israeli strikes overnight. Israel said four of its soldiers were also killed.

Israeli Prime Minister Benjamin Netanyahu said in a social media post Friday morning that he instructed the Israel Defense Forces to strike Hezbollah “with full force” in response to a “heinous attack” by the Iran-backed group.

Hours later, a U.S. official told CNBC that the two groups agreed to a ceasefire from 4 p.m. local time, or 9 a.m. ET.

Oil prices turned lower after the ceasefire was reported.

“While an important breakthrough, this agreement marks really the beginning rather than the end of the process to try to end the war and address Iran’s nuclear capabilities,” UBS said in a report.

Despite lingering uncertainty, the agreement has helped ease disruptions in the Strait of Hormuz, where shipping had been affected both by Iranian attacks and the U.S. Navy’s blockade of Iran’s ports and coastal areas under Trump’s direction.

The easing of shipping disruptions could benefit economies that rely heavily on imported oil, as lower oil prices may help contain inflation and reduce pressure on central banks to raise interest rates, David Roche, a strategist at Quantum Strategy, told CNBC’s “Squawk Box Asia“.

“Beyond that, this is a really bad deal,” Roche said, noting that it puts the Iranians in a stronger position in the Gulf and limits external interference in the country’s domestic affairs.

“Iran is going to make the Middle East very unstable, that’s bad in the long term,” Roche said. He added that Israel was unlikely to accept the agreement. “Iranians, I will predict you confidently, will never, never abandon their nuclear ambitions,” Roche said.

The interim agreement has also drawn criticism from some who argue that the U.S. conceded “too much” to Iran, prompting both Trump and Vance to defend the deal.

“The United States isn’t giving up a cent of money to Iran,” Vance said in defense of the agreement.

Trump also pushed back against critics on Truth Social on Thursday.

“These fools, who think I haven’t been tough enough on Iran, when the Stock Market Just Hit A RECORD HIGH, and Oil prices are ‘tumbling’ down, are either jealous, bad people, or stupid,” Trump wrote.