ICYMI: ISW and @criticalthreats assessed on Friday that IRGC commander Vahidi’s hardline faction remains in a stronger position to argue that continued pressure on the United States, rather than Iranian concessions, can secure the regime’s objectives. Iranian regime decision-making may therefore take a long time to react to economic deterioration, even as the Iranian economy worsens. Read the full assessment via the link below ⬇️

Significant statements from Tehran today point to a growing recognition among the Iranian leadership of the severity of the economic situation and the erosion of Iran’s ability to use the Strait of Hormuz as leverage in light of U.S. military gains in opening a corridor through the strait. President Pezeshkian stressed that the government does not deny the shortages and that it would be better to end the war now, while Iran is in a position of strength and dignity and the entire world recognizes its victory. Majles Speaker Qalibaf stated that no matter how much military power Iran possesses, if the people are hungry, it will not be able to endure. Nevertheless, at this stage, there is still no indication that Iran is prepared to show flexibility and return to the MOU without preconditions, apart from its original demand for the lifting of the naval blockade and some sanctions relief. Tehran still appears to assess that, despite recent developments, it retains the ability to inflict significantly greater damage on the global economy and its Gulf neighbors, and that the price of a possible escalation (even to the point of renewed hostilities) is lower than the cost of yielding to U.S. demands and reopening Hormuz unconditionally in return for a temporary ceasefire that does not guarantee an end to the war and that, from Tehran’s perspective, could be terminated after the November midterm elections. Moreover, the ambiguous messages coming from the United States, including Treasury Secretary Bessent’s statement yesterday, in which he once again spoke about the collapse of the Iranian regime, could reinforce opposition in Tehran to any possible agreement. It is not clear that Tehran understands what the United States is prepared to offer Iran at this stage, particularly when President Trump himself appears confident that economic pressure can achieve what military pressure failed to accomplish. The bottom line, therefore, is that even if there is a growing recognition in Tehran that the current situation is not working in Iran’s favor, it is far from certain that this will be enough to build the necessary consensus—including among Ahmad Vahidi, Mohsen Rezaei, and more importantly Mojtaba Khamenei—to allow a change of course.

Iranian families are cutting back on food and other essentials as sanctions, war and a naval blockade deepen economic pressure, the Associated Press reported. Rice prices are 60% higher and beef prices 150% higher than before the war, while inflation is expected to approach 70% by year-end and the economy to shrink by more than 5%, according to the report. The money workers earn is worth about half as much as a year ago, putting food, medicine and other essentials further out of reach. Iran is also consuming more gasoline each day than it produces and may need to raise prices as supplies tighten, according to the report. Malek Hosseini, Iran’s deputy labor minister for entrepreneurship and employment development, said more than 1 million formal-sector jobs had been lost during the 40-day war, the semi-official Mehr News Agency reported. iranintl.com/en/202608234983

تفاهم‌نامه‌ای که امضا شد حاصل خرد جمعی اعضای شعام بود و همه اعضا با آن همدل‌اند. باور دارم این تفاهم‌نامه مرکز ثقل روابط خارجی ما در آینده خواهد بود. باید بکوشیم دشمن را وادار کنیم به آنچه امضا کرده پایبند بماند. امنیت کشور، منطقه و هم‌پیمانان ما با این تفاهم‌نامه ارتقا می‌یابد.

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BREAKING: Negotiations between Iran and Oman over the Strait of Hormuz are in their final stages, Iran's FM Abbas Araghchi said, according to IRNA, after the US said it had called of an attack on Iran to give room for diplomacy.

Al Jazeera's Tehran bureau chief: Talks between Iran and Oman regarding the Strait of Hormuz are continuing and have not been suspended, even after the renewed tensions between the United States and Iran. There is discussion of an Iranian proposal that could bring the two sides closer to an agreement, and there are indications that developments may occur on this issue in the coming days. Any solution to the Strait of Hormuz issue resulting from the Iran–Oman talks would have a positive impact on negotiations between Iran and the United States. According to information received in Tehran, if the Iran–Oman talks lead to the reopening of the Strait of Hormuz and the restoration of normal maritime traffic, Washington would lift the naval blockade and the oil sanctions. Such a move would significantly pave the way for both sides to return to the negotiating table and resume implementation of the MOU. Mediators are currently exchanging messages between the parties, and the ongoing talks could lead Iran and the United States to resume implementation of the memorandum of understanding and the outcomes of the Switzerland meeting.

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Iran's Interior Minister Eskandar Momeni traveled to Pakistan for talks with senior Pakistani officials as exchanges of attacks between the United States and the Islamic Republic continued, Pakistani media reported. Pakistani sources said Momeni arrived in Islamabad for meetings with Pakistani officials.