U.S.-Iran talks in Islamabad concluded without a breakthrough, yet marked significant progress after a shaky ceasefire. Deep divides persist regarding Iran's nuclear program, Strait of Hormuz control, and Israeli strikes in Lebanon. The author critically views President Trump's war as a strategic setback for the U.S. and its allies. Washington must pursue a negotiated settlement, free of ultimatums. Iran, despite its leverage, should avoid overplaying its hand, needing security guarantees and reconstruction support. Both must make concessions; Iran on nuclear issues and the Strait, Israel ending aggression. Islamabad offers a dialogue starting point.