The deal comes after recent escalation of hostilities between US and Iran near the Strait of Hormuz. After the United States and Iran recently engaged in tit-for-tat strikes over hostilities near the Strait of Hormuz, the two sides finally, on Wednesday, reached a week-long de-escalation agreement as the countries continued technical talks in Qatar, according to a report by The New York Post. The truce coincides with Fourth of July celebrations in the United States and funeral ceremonies in Iran for former Supreme Leader Ali Khamenei, scheduled for Friday, Saturday and Monday. The understanding follows an escalation in the strategic waterway after Iran struck a vessel near Oman last week. The United States subsequently carried out strikes on Iranian missile and drone storage sites along the Strait of Hormuz. Despite the temporary reduction in tensions, Washington and Tehran remain divided over who has authority over shipping in the Strait of Hormuz. Iran maintains that it has the right to regulate maritime traffic through the waterway and has argued it should be able to impose transit fees once current interim arrangements expire. The Trump administration rejects that position, describing the Strait as an international waterway and opposing any Iranian claim to levy tolls on shipping. The disagreement has become one of the central issues in the wider negotiations, with US officials seeking to persuade Tehran to abandon its demands in return for broader economic benefits under a future agreement. The memorandum of understanding between the two countries states that Iran will work with Oman to "define the future administration and maritime services in the Strait of Hormuz in discussions with other Persian Gulf Littoral States." However, the two sides have offered different interpretations of that language. US officials have said the provision prevents Iran from imposing transit fees because any future arrangements would require agreement from Gulf states. Iran, however, has argued that the wording recognises its sovereignty over the Strait and merely encourages discussions with neighbouring countries. Iranian media affiliated with the Islamic Revolutionary Guard Corps (IRGC) said the memorandum had been amended during the final stages of negotiations. "In the final moments of the negotiations, the text of the memorandum of understanding was amended to clearly and explicitly emphasize the issue of the Iranian-Omani sovereignty over the Strait of Hormuz," Fars News quoted an unidentified source as saying. The report added: "The use of the term 'maritime services' means that the United States has accepted that fees will be paid to Iran." US President Donald Trump and officials from his administration have rejected the interpretation, insisting the agreement does not permit Iran to collect tolls or fees from ships using the Strait.