Iran has dropped its demand that the US remove the Islamic Revolutionary Guard Corps from the State Department’s list of Foreign Terrorist Organizations in exchange for Tehran returning to compliance with the nuclear agreement it signed with world powers in 2015.

After months of unconfirmed reports on the matter, the Biden administration revealed in May that it would not be heeding the Iranian demand in what was assumed to amount to a significant blow to the negotiations aimed at restoring the agreement known as the Joint Comprehensive Plan of Action.

But a senior administration official told CNN on Friday that Iran has dropped the “red line” demand amid reports that the sides are nearing an agreement on a joint US-Iranian return to compliance with the JCPOA. A senior US official confirmed the report to The Times of Israel.

In 2018, former president Donald Trump withdrew from the deal that traded sanctions relief for curbs on Iran’s nuclear program. He then instituted a “maximum pressure” sanctions regime targeting various Iranian sectors, leading Tehran to respond by expanding its nuclear program in violation of the JCPOA. US President Joe Biden entered office vowing to try and revive the deal and his administration has spent the past year-and-a-half in on-and-off indirect negotiations with Iran to achieve that goal.

While the sides had been pessimistic about prospects of a deal for months, progress has been reported over the past week.

The senior administration official speaking to CNN said that in its response to the draft nuclear deal agreement proposed by the European Union Iran did not include the IRGC delisting demand.

Enrique Mora, a leading European Union diplomat, second right, attends a meeting with Iran’s top nuclear negotiator Ali Bagheri Kani, third left, in Tehran, Iran, March 27, 2022. (Iranian Foreign Ministry via AP)

“The current version of the text, and what they are demanding, drops it,” the official said. “So if we are closer to a deal, that’s why.”

“The President has been firm and consistent that he will not lift the terrorism designation of Iran’s Revolutionary Guards Corps.”

The official also revealed that Iran had dropped other demands for the US delist to delist several companies with ties to the IRGC.

While the deal is now “closer than it was two weeks ago, the outcome remains uncertain as some gaps remain. President Biden will only approve a deal that meets our national security interests,” the official said.

Another administration official speaking to CNN was similarly cautious, explaining that progress may be slow moving forward but that there was indeed more momentum now than there was over the past year.

On July 26, European Union foreign policy chief Josep Borrell submitted a proposal to Iran on returning to the nuclear deal, with a deadline for it to respond by this past Monday at midnight.

Josep Borrell, the High Representative of the European Union for Foreign Affairs and Security Policy speaks during a meeting with Iran’s Foreign Minister at the Foreign Ministry headquarters in Iran’s capital Tehran on June 25, 2022. (Atta Kenare/AFP)

According to a Politico report citing a senior Western official, the Iranian response was received Monday evening Brussels time and focused on remaining questions related to sanctions and “guarantees around economic engagement.”

Iran’s state-run IRNA news agency offered no details on the substance of its response, but suggested that Tehran still wouldn’t take the European Union-mediated proposal, despite warnings there would be no more negotiations.

Top Israeli officials have warned their counterparts in the US and Europe against the deal and called for the negotiators to give up on the talks.

National Security Adviser Eyal Hulata will head to Washington, DC, next week to conduct a series of meetings with US officials on the Iran nuclear program.

Israel believes Iran wishes to build a nuclear bomb, has revealed intelligence it says reveals the Iranian weapons program and has reportedly carried out sabotage operations within the Islamic Republic to delay the development of such a weapon.

Iran has denied any nefarious intentions and claims its program is designed for peaceful purposes, though it has recently been enriching uranium to levels that international leaders say have no civil use.

Hezbollah terror chief Hassan Nasrallah warned of an “escalation” with Israel if Lebanese demands are not met in maritime border talks.

In a televised speech Friday for a Hezbollah event, Nasrallah denied any link between the Iran-backed terror organization’s actions in the maritime dispute — which the United States has been mediating — and the ongoing negotiations to restore the 2015 Iranian nuclear deal, which appeared to be climaxing.

“If the Lebanese state is not given what it wants, we will be heading to an escalation, even if the nuclear agreement gets signed,” the Hezbollah leader said, according to Lebanese news site Naharnet. “Should the US mediator come and give the Lebanese state what it wants, we will be heading to calm, regardless whether or not there will be a nuclear agreement.”

“The eyes of the Lebanese should not be on Vienna… The eyes should be on Karish, the sea border and northern Israel,” he added, referring respectively to the location of the border talks and an Israeli offshore gas field claimed by Lebanon.

Nasrallah also hit out at Amos Hochstein, the US State Department mediating the maritime dispute between Israel and Lebanon, who he said was “still wasting time.” He said Hochstein’s “time is running out” to broker a deal.

Hezbollah is poised to gain financially from a renewed nuclear accord, which would see its chief patron Iran receive substantial relief from US sanctions in exchange for reimposing curbs on its nuclear program, while a maritime border deal with Israel would position Lebanon to reap the windfall of profits from offshore gas exploration.

An Israeli Sa’ar Class 5 Corvette guards the Energean floating production, storage and offloading vessel at the Karish gas field, in footage published by the military on July 2, 2022. (Israel Defense Forces)

The Hezbollah chief has recently issued a number of threats toward Israel, amid intensified US efforts to resolve the more than a decade-old maritime border dispute between Jerusalem and Beirut, which have officially been at war since the Jewish state’s creation in 1948.

Both countries claim some 860 square kilometers (330 square miles) of the Mediterranean Sea. Lebanon also claims that the Karish gas field is in disputed territory under ongoing maritime border negotiations, while Israel says it lies within its internationally recognized economic waters.

Israel and Hezbollah are bitter enemies that fought a monthlong war in the summer of 2006. Israel considers the Iran-backed Shiite group its most serious immediate threat, estimating that Hezbollah has some 150,000 rockets and missiles aimed at Israel.

Lebanon badly needs an agreement over the maritime border in the Mediterranean as it hopes to exploit offshore gas reserves to try and alleviate what has become the worst economic crisis in its modern history.

Last month, the Israeli military shot down four unarmed Hezbollah drones flying toward the Karish field. Lebanon’s Prime Minister Najib Mikati at the time criticized Hezbollah, saying the move could pose risks to the country. Hezbollah also aired footage showing the gas platforms in the area.

Earlier this month, Israeli security officials warned the country’s political echelon that a failure to reach an agreement in the maritime border dispute with Lebanon will potentially mean being dragged into a military conflict with Hezbollah.