Iran is conditioning further progress in negotiations with the United States on the immediate release of $12 billion in Iranian funds frozen in Qatar, an informed source with direct knowledge of the talks told Iran International on Sunday night.

The demand has emerged as the sole remaining obstacle to advancing a draft Memorandum of Understanding between Washington and Tehran, the source said, and Iranian negotiators are insisting that guaranteed access to the funds be granted in the initial phase of the diplomatic roadmap before any preliminary understanding can move forward. Tehran’s broader position, the source added, is that all of its frozen assets worldwide must be released as part of any eventual comprehensive deal.

The MOU, which Al Arabiya has reported is being referred to as the “Islamabad Declaration,” would trigger a 60-day ceasefire extension during which both sides would pursue further talks and could agree to additional extensions. If approved by Iran’s Supreme National Security Council, the document would be sent to Mojtaba Khamenei for final sign-off. Final negotiations on a broader peace deal would only begin after both governments sign the MOU and the ceasefire takes effect, Al Arabiya reported.

A senior Iranian source told Reuters in April that the United States had agreed to release Iranian assets held in Qatar, a claim a US official denied at the time. A second Iranian source told the news agency the figure agreed to was $6 billion.

A high-level Iranian delegation arrived in Doha on Monday for talks tied to the negotiations. Parliament Speaker Mohammad Bagher Ghalibaf, Foreign Minister Abbas Araghchi, and Central Bank Governor Abdolnaser Hemmati are meeting Qatari Prime Minister and Foreign Minister Sheikh Mohammed bin Abdulrahman Al Thani, an official briefed on the visit told Reuters. State media reported that Hemmati’s trip followed earlier discussions with a Qatari delegation in Tehran focused on the frozen funds.

The Doha talks will center on terms of a potential ceasefire arrangement with Washington, with particular focus on the Strait of Hormuz and Iran’s stockpile of highly enriched uranium, the official said.

The current draft of the MOU calls for the reopening of the Strait of Hormuz without tolls and requires Iran to clear mines it deployed in the waterway, according to Axios. In exchange, the United States would lift its blockade of Iranian ports and waive certain sanctions, including measures restricting Iranian oil sales. Both governments would also commit to refraining from attacks on each other or on their allies, Iranian media reported.

Questions surrounding Iran’s nuclear program and its enriched uranium stockpile would remain subject to ongoing negotiation, though the MOU would commit Tehran to abandoning any pursuit of nuclear weapons.

The draft also addresses the war between Israel and Hezbollah in Lebanon, specifying that the conflict will end, Axios reported. A US official told the outlet the arrangement would not amount to a “one-sided ceasefire,” adding that if “Hezbollah behaves, Israel will behave.”

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