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During the last years of the Safavid dynasty in Iran, Ottomans were able to annex most of Caucasus and west Iran, due to hereditc strife, civil unrest and total chaos. Meanwhile, Afghans were able to annex a part of Khorasan. The shah had to appoint Nadir, an Iranian Afshar Turkoman warlord, as his commander in chief. Under Nadir’s brilliant commandship, Iran was able to regain most of her losses. After the victories, it was an easy matter for Nadir to seize the throne. In 1736, Nadir Shah founded the Afsharid dynasty (to be continued up to 1796.) Nadir Shah was planning to found another great Persian empire, stretching from the Indus to the Bosphorus, like in ancient times. After reconquering former territories of Iran, he further tried to annex the eastern territories of the Ottoman Empire (East Anatolia and Iraq). He also proposed to reconcile the two sects (mazhab) of Islam. (Ottomans were of Sunni faith and most of Iranians were of Shia faith.) He planned to force Ottomans, then the champion of Sunnis, to accept Shia as a fifth legal sect of Islam.
Both sides now saw that neither could win a decisive victory, and that continuation of the war would only drain their strength. Nadir Shah hoped to use his victory at Baghavard to secure a favourable settlement, finally abandoning his claims on behalf of the Ja'fari sect, and instead concentrating on the demand that all of Iraq, including Baghdad, Basra and the Shi'i holy places of Najaf and Karbala, be turned over to him along with the Kurdish area of Van. A series of letters and exchanges of ambassadors followed, and eventually an agreement was hammered out on 4 September 1746, by which the Qasr-i-Shirin treaty boundaries were restored without change, with provisions made for the exchange of prisoners, as well as the exchange of ambassadors once every three years. Nadir Shah thereby abandoned all his former demands and the Ottomans accepted peace in accordance with the earlier agreements.