Iran Is Celebrating a Deal With the US-Now the Fight Begins at Home

Iranian officials are running a victory lap after reaching a memorandum of understanding (MOU) with the White House that marks a significant step toward ending the war launched by the United States and Israel in February.

There is reason to celebrate. The Islamic Republic has not only emerged from the confrontation mostly intact despite losing key figures and scores of military equipment but also appears to have won major concessions involving the fate of frozen assets, pausing the clash between its Lebanese Hezbollah ally and Israel and maintaining a say over the crucial Strait of Hormuz oil and gas chokepoint.

The narrative of shifting from a war of survival to exerting leverage against superior foes is weighing heavily on Iranian engagements with China and Russia, as well as with other countries in the Middle East and beyond, since the separate MOU signings by Iranian President Masoud Pezeshkian and U.S. President Donald Trump on Thursday.

But the battle is far from over. Not only does the current deal-set to be made official in a ceremony in Switzerland on Friday-not yet constitute lasting peace, but core political and economic grievances loom at home for the Islamic Republic, which has largely united thus far under a wartime footing.

“Historically, the Islamic Republic has always been strongest during periods when the country has felt under external assault,” John Ghazvinian, executive director of the University of Pennsylvania’s Middle East Center, told Newsweek. “So, the natural concern among its leaders will be over a possible return to protests and instability once the immediate threat of war has lifted.”

The Battle Within

Even prior to the joint U.S.-Israeli war on Iran, the Islamic Republic faced one of its most dire existential threats.

Protests initially linked to Iran’s deepening economic woes exploded in early January into a nationwide movement of demonstrations and unrest in which security forces cracked down with force, leading to at least thousands of deaths, with some foreign monitors putting the figure in the tens of thousands.

The bloodshed, which Iranian officials blamed primarily on foreign infiltrators, drew threats of intervention from Trump and another round of failed talks between Washington and Tehran.

A number of Iranians felt betrayed by Trump’s promises of support, as the U.S. would not launch attacks until more than a month after the Iranian government declared victory over the dissent. When Trump and Israeli Prime Minister Benjamin Netanyahu called for another uprising amid the war, no new manifestations of opposition emerged.

Yet the political and economic trends that pushed many Iranians to take to the streets remain unaddressed and may ultimately be aggravated by the conflict.

The late Supreme Leader Ayatollah Ali Khamenei has been replaced by his son, Mojtaba, and a cadre of influential hard-liners with ties to the Islamic Revolutionary Guard Corps has risen to the top. While Trump has lauded Iran’s current leadership, which also includes Parliament Speaker Mohammed Bagher Qalibaf, as “very rational” and even “nice to deal with,” observers have suspected they may ultimately be less willing to compromise on key issues at the heart of the U.S.-Iran feud, potentially even the nuclear question.

Meanwhile, Trump’s immediate counterpart, Pezeshkian, is a reformist who sought to prioritize economic challenges and rekindle engagement with the West upon his 2024 election. He will have to bet on the U.S. commitment to a broader deal to realize this platform, one similar to that of former Iranian President Hassan Rouhani, who, alongside former President Barack Obama, oversaw the 2015 nuclear deal, which Trump ultimately abandoned in 2018.

“If the agreement with the United States leads to even modest sanctions relief, the Islamic Republic will have funds at its disposal to spend on economic relief, inflation-busting measures and other forms of social spending that might buy the quiescence of large segments of the population,” Ghazvinian said.

“Of course, it’s also worth underscoring that, although sanctions relief is promised in the letter of the MOU, it is far from guaranteed-and in fact there is a historical record of the U.S. subtly undermining such promises following previous agreements with Iran,” he said.

In comments shared with Newsweek ahead of the MOU signings, Tehran-based security analyst Mostafa Najafi concluded that domestic pressures may constitute a greater obstacle in peacetime than preventing a return to war after Iran had already “succeeded in imposing substantial costs on its adversaries, expanding the scope of the conflict, and establishing itself as an indispensable actor in any future regional security arrangement.”

“Under such circumstances, Iran's principal challenge moving forward may not be another direct military assault, but rather the economic and social pressures that accompany prolonged confrontation,” Najafi said. “The lesson many of Iran's adversaries appear to have drawn is that direct military action against Iran is considerably more costly than previously assumed.”

“As a result, future efforts are likely to focus increasingly on economic attrition, political pressure, and attempts to weaken domestic cohesion,” he added. “Ultimately, the decisive arena for Iran's future resilience may not be the battlefield, but its ability to sustain economic stability, social cohesion, and national unity under prolonged pressure.”

Maintaining the Momentum

For now, however, Iran is riding high on having proven a more costly foe than the White House and its Israeli ally had anticipated.

“Iran won by not losing militarily, and gave nothing of substance in the MOU,” Barbara Bodine, a former U.S. ambassador and senior State Department official now serving as director of Georgetown University’s Institute for the Study of Diplomacy, told Newsweek. “Their narrative will be they faced two formidable militaries and are still standing, albeit in rubble and thousands dead.”

“The war by all accounts significantly depleted our munitions stocks in Asia and for Ukraine, which is good for Russia and China, and demonstrated that the U.S.-or at least Trump-is something of a paper tiger that lacks the fortitude to stay the course,” Bodine said.

She pointed out that many of Trump’s most serious threats, such as destroying Iran’s “civilization,” turned out to be “hollow,” while his framing of the MOU’s promise of $300 billion in investments for Iran proved “ephemeral.” Rather than achieve “the multitude of stated objectives,” Bodine said the MOU “is barely more than an extended ceasefire and a return to the status quo ante-reopening the Strait; Iranian regime still in power; nothing on proxies or missiles.”

Ghazvinian, for his part, saw the next development for Iran as a battle between reformist and principlist factions, both seeking to bolster their competing visions for the Islamic Republic by taking credit for battlefield and negotiating-table wins.

“Politicians from the reformist and pragmatist camps will be making the claim that this MoU shows that ‘negotiations work better than war’ and that all the fighting of the past months wasn’t able to achieve what a few rounds of skillful negotiating did,” Ghazvinian said.

“Meanwhile, politicians from the hardline camp will be claiming that it was Iran’s military posture that saved the day, that ‘strength and resistance is the only language that the enemy understands’-and that Iran would not have won in the way that it did without its bold strategy of closing the Strait of Hormuz and taking the fight directly onto Israeli soil,” he said. “Both will be right.”

This duality is already surfacing across Iranian media and official channels.

As Iranian Foreign Minister Abbas Araghchi led diplomatic efforts to engage with not only China and Russia but also Italy and Oman in a bid to highlight Tehran’s willingness for dialogue, Iranian defense officials have begun showcasing weapons production and military prowess proven in the face of war.

And there is another card Tehran is likely to play to bolster its position. Iran’s tactic of striking Gulf Cooperation Council (GCC) states hosting U.S. bases throughout the conflict has exacerbated existing divisions among the six-nation bloc, particularly between Saudi Arabia and the United Arab Emirates, and spurred new debates about U.S. security commitments.

“As for its next steps, I expect Iran to make improving its relationship with Persian Gulf neighbors-especially Saudi Arabia-into an immediate priority,” Ghazvinian said. “Iran recognizes that recent tensions between the UAE and Riyadh have created a rare opportunity.”

“A wider division among the GCC states, with the perception that Abu Dhabi backed the wrong horse in this war, would play very strongly to Iran’s regional position,” he added.

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This story was originally published June 18, 2026 at 1:58 PM.