The United States and Iran agreed to a two-week ceasefire barely an hour before President Donald Trump's Wednesday deadline to obliterate the country, triggering global relief alongside apprehension.
Tehran has agreed to temporarily reopen the Strait of Hormuz, through which much of the world's oil, gas and fertiliser passes, easing concerns for the battered global economy.
While the announcement was broadly welcomed internationally, much work remained to prevent a return to fighting, with UN chief Antonio Guterres calling for all parties to "pave the way towards a lasting and comprehensive peace".
The White House said Israel had also agreed to the ceasefire, but Prime Minister Benjamin Netanyahu said it does not include Lebanon, where Israel's operation in response to rocket fire by Iranian-backed Hezbollah has killed more than 1,500 people, according to Lebanese authorities.
On Wednesday, the Israeli military pressed on with the war in Lebanon, warning residents of one building near the southern city of Tyre to evacuate, with Lebanese state media reporting renewed strikes. Israel had encouraged Trump to launch the war against Iran, its arch-foe, and in the first strikes killed Tehran's long-serving supreme leader, Ayatollah Ali Khamenei.
A peace agreement would leave in place the Islamic republic despite US and Israeli hopes of toppling it. The United States and Israel said that they attacked Iran to degrade its military capacity.
Trump had set a deadline for Iran to open the Strait of Hormuz by midnight GMT. Iranian Foreign Minister Abbas Araghchi confirmed safe passage for two weeks for ships through the strait, which Tehran sealed off in retaliation for the war. "If attacks against Iran are halted, our Powerful Armed Forces will cease their defensive operations," Araghchi said. Later on Wednesday, Trump posted on social media that the US would "be helping with the traffic buildup in the Strait of Hormuz".
Oil prices plunged by more than 17 percent after the ceasefire announcement, while European natural gas dropped 20 percent. Stock prices also soared in early trade Wednesday in Asia. Trump said the United States was "very far along" in negotiating a long-term agreement with Iran, which had submitted a 10-point plan that he said was "workable."
But Iran publicly released points that took maximalist positions, including lifting long-standing US sanctions, guaranteeing its own "dominion" over the strait and removing US forces from the region. Crucially, it also said its plan would require Washington to accept its uranium enrichment programme.
The attacks have shattered the monarchies' hard-fought reputation for safety and stability. On Wednesday, the United Arab Emirates, which bore the brunt of Iran's Gulf attacks, also claimed victory. "The UAE emerged victorious from a war we sincerely sought to avoid," presidential adviser Anwar Gargash said in a post on X.
Much global reaction, however, focused on the need to turn the ceasefire into a workable peace deal. Oman, which mediated unsuccessful talks between Washington and Tehran that were halted by the war, spoke of "the importance of intensifying efforts... to identify solutions capable of resolving the crisis at its roots".
British Prime Minister Keir Starmer announced an immediate visit to the Gulf and declared "we must do all we can to support and sustain this ceasefire, turn it into a lasting agreement and re-open the Strait of Hormuz".
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