The Algiers Accord was the culmination of diplomatic negotiations between Iran and Iraq, spearheaded by Algerian mediation. The key focus of the discussions was the border dispute over the Shatt al-Arab waterway, vital for both countries due to its significance for oil transport and regional trade. The agreement established the border along the mid-channel of the waterway, which was a significant shift, as it was previously a contentious issue that had led to military confrontations. With both countries experiencing internal pressures and external threats, the timing of the Accord was ripe for reducing hostilities.

During the negotiations, Iran, under the leadership of Mohammad Reza Shah Pahlavi, and Iraq, led by President Ahmed Hassan al-Bakr, made several concessions that were necessary for reaching an agreement. Algeria's role was crucial, providing a neutral ground for discussions and assuring both parties of Algeria's backing should they agree to the terms. The signing ceremony occurred on March 6, 1975, in Algiers, reflecting a broader Arab national interest in stability against external influences, particularly during a period marked by tensions in the Middle East.

Following the signing, both nations experienced an initial period of improved relations, characterized by newfound cooperation in various sectors, including trade and military alignment. However, underlying tensions continued, exacerbated by differing political ideologies and regional ambitions, setting the stage for future conflicts between Iran and Iraq. This Accord, while initially successful, did not ultimately lead to enduring peace, illustrating the complexity of Middle Eastern geopolitics.