The United States is set to release $12 billion in frozen Iranian assets as part of an emerging peace agreement aimed at easing tensions between Washington and Tehran, according to reports from sources familiar with the negotiations.

The proposed arrangement is part of a broader diplomatic framework designed to halt hostilities, improve regional stability, and pave the way for further discussions on Iran's nuclear programme and sanctions relief.

Under the reported agreement, the release of the funds would serve as an initial confidence-building measure between both countries. Iranian officials have long demanded access to assets frozen under international sanctions, arguing that the funds are crucial for the country's economic recovery.

Sources close to the negotiations said the asset release could be the first phase of a larger package that may eventually unlock additional Iranian funds held abroad.

The deal is also expected to include commitments from both sides to reduce tensions and engage in sustained diplomatic dialogue. The breakthrough follows weeks of intensive mediation efforts involving regional and international actors seeking to prevent further escalation in the Middle East.

Negotiators have reportedly focused on issues including sanctions relief, security guarantees, and measures to ensure freedom of navigation through key international shipping routes.

Analysts say the agreement could mark a significant step toward rebuilding trust between the two countries after years of strained relations and economic restrictions.

The development has also raised hopes of greater stability in global energy markets, with investors closely monitoring the outcome of the talks.

While details of the arrangement are still being finalized, officials from both sides have indicated that discussions are progressing positively. A formal announcement is expected once all parties conclude the remaining aspects of the agreement.

If implemented, the deal would represent one of the most significant diplomatic breakthroughs between the United States and Iran in recent years and could open the door to broader negotiations on regional security and economic cooperation.