MENA Strategic Bulletin

Oman hosts US-Iran talks in Muscat

On Saturday April 12, US and Iranian officials held talks in Muscat, Oman, marking their first face-to-face diplomatic meeting since Donald Trump returned to office. US Special Envoy to the Middle East Steven Witkoff met with Iranian Foreign Minister Abbas Araghchi in a session that lasted just over two hours. Another round is expected to take place this coming Saturday.

The meeting comes amid heightened tensions around Iran’s ongoing expansion of its nuclear programme. The IAEA recently reported that Iran’s stockpile includes 275 kilograms of uranium enriched to 60%. Despite this, both sides described the talks as positive. The White House called them “very constructive”, while Araghchi described the atmosphere in which the talks took place as “productive, calm and positive”.

President Trump addressed the talks ahead of time, stating, “I want Iran to be a wonderful, great, happy country, but they can’t have a nuclear weapon”. He also threatened consequences if no diplomatic agreement is reached. The ongoing US air campaign against the Houthis, the Iran-backed Yemeni militant group, suggests the Trump administration is willing to make good on these threats if needed.

Stakeholder and regional impact

The main success of this initial engagement has been to provide positive forward momentum for further talks.

Iran

For Iran, timing is everything. Under UN Security Council Resolution 2231, all remaining UN sanctions on Iran are set to expire on October 18, 2025. However, this expiration can be overridden if the original JCPOA participants reimpose snapback sanctions. The US is expected to issue its recommendation to European allies by May 2025 at the latest. This makes the current negotiations extremely important for Tehran. Reaching a deal with Washington would improve Iran’s position significantly, potentially avoiding a coordinated snapback effort and opening the door to sanctions relief. Iranian President Masoud Pezeshkian has already stated that Iran is “not after a nuclear bomb” and emphasised that his government is open to direct US investment if an agreement is reached.

United States

For the US, the talks present a timely opportunity for diplomatic progress. Amid several stalled or deteriorating foreign policy tracks, including the collapse of the Gaza ceasefire and deadlocked efforts in Ukraine, the Iran file stands out as a potential breakthrough. A negotiated outcome with Iran would allow the Trump administration to present a statement foreign policy win back home and on the international stage.

Witkoff made clear in Muscat that the President had personally instructed them to prioritise diplomacy. While the administration continues to lead with a maximum pressure posture, it doesn’t preclude making meaningful concessions behind closed doors. The campaign is designed to maintain leverage and avoid political fallout at home. But as ever, Trump wants a deal and will be prepared to make one.

What’s next?

The core challenge remains distrust. Trump pulled out of the original JCPOA. Iran has built up its nuclear stockpile far beyond past levels. Neither side is walking into these talks without full knowledge of these facts. But both are pragmatic enough to see what’s at stake, and both understand the consequences of failure and the benefits of securing a deal.

The next round of talks in Oman will be critical. If progress continues, we could be looking at the early architecture of a deal, similar to that of the JCPOA, but also including new arrangements shaped by the realities of 2025. Such a deal would put the brakes on Iran’s nuclear programme, avoid a regional crisis and give both governments something to point to as a diplomatic success.

Qatar invests $7.5bn in Egypt

Qatar has committed to $7.5bn in direct investment to Egypt, announced during President Abdel Fattah al-Sisi’s visit to Doha on April 14. The deal, confirmed in a joint statement after talks with Emir Sheikh Tamim bin Hamad Al Thani, is part of Cairo’s push to attract foreign capital as it faces a mounting debt crisis and widening deficit. The Suez Canal, which is a major source of foreign currency for the Egyptian government, is currently recording $800m in monthly losses due to regional unrest, primarily Houthi attacks on ships in the Red Sea. The two leaders also discussed regional developments and issues including Gaza, Syria, Lebanon and Sudan.

Stakeholder and regional impact

Egypt

Egypt is in urgent need of foreign liquidity. The Egyptian government has been implementing IMF reforms, including raising interest rates and devaluing the currency, resulting in the Egyptian pound losing over 35% of its value since the start of the year. These reforms were aimed at securing external backing, first from the UAE, which delivered $35bn in February, and now from Qatar. The investment decision from Doha may have been influenced by a period of rapprochement between Egypt and Turkey, one of Qatar’s regional allies. The move is also a tactical hedge for Cairo’s Gulf strategy in light of less stable relations with the UAE following differences on Gaza.

Qatar

Qatar’s return to Egypt as a major investor marks a full reversal from the diplomatic crisis that saw Cairo back the Gulf embargo against Doha just a few years ago. The current relationship is transactional, but tactically sound. Both Egypt and Qatar are involved in Gaza ceasefire mediation. Investing now gives Doha leverage in postwar reconstruction planning and closer ties to Egypt. The move also fits Qatar’s recent international pattern of tapping into new markets, which started with a pledge of $10bn to France earlier this year.

What’s next?

No detailed timeline or targeted sectors have been announced yet for the agreement.  Qatar is betting on Egypt’s recovery, and Egypt is signalling openness to Gulf partners beyond Abu Dhabi. The real question will be whether Qatari investment can translate into durable influence and whether Cairo can manage to simultaneously deal with its domestic economic issues as well as its mediation efforts in the Gaza war.

Israel issues latest ceasefire proposal for Gaza

Israel has offered a 45-day ceasefire in Gaza as part of a new proposal aimed at securing hostage releases and opening the door to broader negotiations. The deal includes the release of 10 Israeli hostages in exchange for 120 Palestinians serving life sentences and over 1,000 detainees arrested since October 7. Israeli forces would partially withdraw to pre-March 18 positions, allow aid deliveries to resume and enable reconstruction efforts to begin. Talks for a permanent ceasefire would be mediated by Egypt, Qatar and the US.

Stakeholder and regional impact

Israeli officials have made clear that troops will stay deployed not only in Gaza but also in Lebanon and Syria “indefinitely,” a statement from Foreign Minister Israel Katz confirmed this week. The plan allows for tactical repositioning but not full withdrawal, and Israeli control over key transit corridors like Netzarim would remain intact.

Meanwhile, Hezbollah has pulled back from roughly 190 of its 265 military positions in southern Lebanon, significantly easing pressure on Israel’s northern front. With Israel’s northern area now safer and the threat from Hezbollah reduced, Israel has greater strategic flexibility and less urgency to wind down its operations in Gaza.

Hamas has already rejected one of the proposal’s core conditions for a permanent ceasefire, namely full disarmament. The Palestinian militant group insists that any ceasefire must include a permanent end to hostilities and full Israeli withdrawal.

What’s next?

This deal is unlikely to develop without serious compromises. Hamas won’t accept terms that leave Israeli troops in Gaza or demand its disarmament. On the other side, Israel isn’t offering a real path to end the war, just a pause on its own terms. Israel violated the ceasefire on March 17 and continued its military campaign, offering little indication that this one could fare better. With over 1,500 Palestinians killed in the past month alone and humanitarian access still cut off, the war looks set to grind on with or without this latest temporary ceasefire agreement.