The $300 billion question: Funding peace, or Iran’s next proxy war?

Published July 14, 2026 7:00am ET



Now that fighting in the Persian Gulf has resumed after Iran attacked commercial vessels in the Strait of Hormuz, the strategic landscape appears to have changed. After three rounds of U.S. military strikes and continued Iranian retaliation, the question is no longer how to restore calm. Rather, policymakers must decide whether the region is heading toward a wider war or whether a new model of peace can still be achieved.

President Donald Trump was correct to order retribution for the regime’s attacks and revoke Iran’s license to sell oil in dollars on the global market.

So, where are we?

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The central question is whether the existing agreement can be preserved or whether a new framework should replace it.

This is not about being critical of the administration. The Kurds are friends of the United States. We want to be helpful to it because, in order to live in peace, we must get Iran right. An agreement with Iran must have teeth. 

The fact that the memorandum of understanding was struck is a positive development. The devil is in the details.

Is it a good idea to achieve an agreement in which Iran gets to fill in the details later? Or, should the structure of the agreement be hammered out now? With Iran’s recent behavior and its pattern over decades, the latter is best.

What would an agreement with Iran require that addresses the national security interests of the U.S. and its regional allies? 

The MOU represents one of the most ambitious attempts to de-escalate tensions and establish a framework for long-term engagement. The agreement seeks to end direct hostilities, stabilize maritime security, normalize economic relations, and create a pathway toward a final settlement. While these objectives appear to prioritize peace, the structure of the agreement raises shortcomings regarding U.S. national security, regional allies, human rights, and the Kurdish question in Iran.

The MOU is state-centric and security-driven. It prioritizes bilateral relations and excludes domestic conditions in Iran. The imbalance creates implementation vulnerabilities and raises questions about whether the agreement can deliver regional stability.

The most important goal is to ensure that the Iranian regime is not stronger or feels more empowered than it did before the war.

The proposed $300 billion reconstruction plan is one of the most significant commitments in the agreement. Large-scale contributions to the regime without basic safeguards risk strengthening the institutions responsible for Iran’s military expansion and internal repression.

For regional allies, increased Iranian economic capacity will translate into enhanced funding for proxy networks in the Middle East, as history has proven. Consider Oct. 7, 2023. 

Nor is there a guarantee that the reconstruction funds will be distributed equitably. The Kurdish region of Iran, home to 10 million people and marginalized, is not addressed in the MOU.

Iran’s reaffirmation that it will not pursue nuclear weapons is a central pillar of the agreement. However, the MOU relies on a commitment rather than enforcement mechanisms.

While nuclear monitoring has typically been robust, the MOU creates an imbalance by providing verification on nuclear issues but no equivalent on human rights compliance.

The ballistic missile question is also of paramount importance. Drones are one thing that can be addressed with technology. However, ballistic missiles are another thing. Without language specifically addressing the containment of the regime’s missile capability, the Middle East will remain at risk. 

When the administration correctly demands that Iran never achieve a nuclear capability, it is envisioning an intercontinental ballistic missile tipped with a nuclear warhead striking in minutes. 

The agreement’s call for a permanent end to hostilities is a critical de-escalation measure. However, it is limited to conflict between the U.S. and Iran and does not address Iran’s use of force inside its borders or against non-state actors, including Iranian Kurds in U.N. camps in Iraq.

From a U.S. national security perspective, the MOU allows Iran to retain capabilities through nonconventional means and regional proxy networks. For U.S. allies, this omission is concerning because it does not restrict Iran’s activities in Lebanon, Iraq, and Yemen.

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Nor does the MOU address Iran’s operations against Kurdish groups in the Kurdistan Region of Iraq, including by drone and missile attacks. As a result, while the war may end, attacks against unarmed Kurdish civilians are not addressed in the MOU.

While the U.S.-Iran agreement may succeed in lowering tensions, regional stability depends on revisions in the MOU that incorporate nuclear verification mechanisms, the well-being of all of Iran’s citizens and an Iranian guarantee that it will stop funding proxies. Only an agreement that is comprehensive, verifiable, enforceable, and backed by meaningful checks and balances can restore confidence, reduce the risk of ongoing conflict, and provide a durable foundation for regional peace and security.

Every effort must be made to meet the above standards. Absent these elements in an agreement, however, requires another solution because, as the past days have proven, an incomplete agreement will fail to counter the Iranian regime’s drive to kill Middle East stability and security.

Salah Bayaziddi is the Komala Party of Iranian Kurdistan Representative to the United States since 2018. He has a doctorate from NSU Florida, a master’s in international relations from Brock University, and a bachelor’s in political science from York University in Canada.