The interim deal between Iran and the P5+1 can be defined as a major breakthrough in global politics. The five permanent members of the UN Security Council and Germany agreed to reach an accord with the Iranian government over its nuclear programme. The agreement offers Iran temporary relief of $ 7 billion from international economic sanctions in the form of eased trade restrictions and access to frozen assets in return for limiting the uranium enrichment process by not exceeding five percent. The interim deal also requires Iran to dilute the stockpiles of uranium that are enriched to 20 percent. The deal got a mixed response from regional players — some states became further insecure where amid sharp criticism Israeli Prime Minister Benjamin Netanyahu declared the move as “a historic mistake” while the Gulf states, though having serious reservations, have shown a restrained response. Yet the world over, the response was a positive one as a majority of states hailed the interim deal on the presumption that it might prove to be a harbinger of regional peace and stability. Notwithstanding the assumptions of two diverging views, it is important to look into the factors that led to the signing of the agreement. Western experts believe that three dimensional economic sanctions compelled Iran to sign a deal with the P5+1 but one should not ignore the fact that perhaps the US has realised the fallacy of its policy of reshaping the Middle East by marginalising the influence of Iran in the region. The US has been unable to achieve its objectives in the region and so ignoring criticism at home, overlooking Israel’s disagreement and opposition, and the concerns of its allies in the Gulf region, President Obama was determined to have a deal with Iran. As far as Iran is concerned, it considers the deal to be a success of diplomacy that revived the legitimate role of the world body, as five permanent members of the Security Council actively participated in the negotiations. The agreement is going to end Iran’s political isolation and its estrangement with the western world, which spans more than three decades. The Iranian economy would be the main beneficiary as unfreezing of Iranian assets in foreign banks and commercial restrictions on gold, cars and petrochemicals would be eased. Commenting on the deal, Fareed Zakaria has noted in TIME magazine that the deal is not like the “US-China rapprochement in 1972 that ushered a new era in their bilateral relationship, but it is like an arms control treaty between the US and Soviet Union in which two adversaries are finding some common grounds.” The accord tackles the nuclear issue while there are still diverging interests on many other issues. However, whatever causes and factors are involved, the Iran nuclear deal is going to have a far-reaching regional impact. It would enable Iran to play a proactive role in defining the contours of the emerging order in the Middle East by reducing the sectarian divide in the region and exerting influence on the Assad regime to resolve the Syrian conflict. In this regard, to allay the concerns of the Gulf states, Iranian diplomacy is at work as the Iranian foreign minister has been visiting these states. Apart from reshaping strategic relations within the Middle East, the Iranian deal would give Iran strategic leverage in negotiating the post-withdrawal transition process in Afghanistan and would enhance trade and transit opportunities for regional states. Pakistan and Iran, the two neighbouring states of Afghanistan have been hosting millions of Afghan refugees for decades and have stakes in the peace and stability of Afghanistan. These two states should develop a consensus on the Afghan-led and Afghan-owned political framework. As far as Pakistan is concerned, it has welcomed the deal as it always desired a peaceful solution to the Iranian nuclear issue. Given the US’s opposition to the Iran-Pakistan (IP) Gas Pipeline Project, the deal is an important step for moving forward on the IP project, which has been stalled since the new government came to power in Pakistan. The Pakistani government has been trying to persuade the US administration that the project does not breach the US sanctions law but the US, even after signing the deal with Iran, insists that oil-related sanctions are still in place and the IP project falls within the orbit of sanctions. Even if sanctions are applicable on the IP project, Pakistan should ask for a waiver of the kind that the US has granted to many other states that are cooperating with Iran in the energy field. The Iranian nuclear deal should impact Pakistan positively. The US should not hinder the project and should consider Pakistan’s energy crisis seriously because Pakistan, like Iran, also has geostrategic importance and its stability can enhance regional harmony and stability. The writer works at the Islamabad Policy Research Institute (IPRI) and can be reached at samanz.pk@gmail.com