US President Donald Trump has claimed an initial agreement aimed at ending the war with Iran is close after posting that he had cancelled strikes on the country.
"We just made a great settlement of the war with Iran," he told reporters in the Oval Office on Thursday.
Iran's foreign ministry spokesperson Esmail Baghaei told state TV that reports of an agreement were "speculative" and "nothing has been finalised".
Trump has made similar claims in the past that the two countries are close to reaching a deal to end the conflict. Hours before the announcement, Trump had declared he would hit Iran "very hard".
The US and Israel launched wide-ranging strikes on Iran on 28 February. Iran responded by attacking Israel and US-allied states in the Gulf, and effectively closing the Strait of Hormuz - a key shipping route for the world's oil and liquefied natural gas.
Despite having agreed a ceasefire in April, the US and Iran have exchanged intermittent fire, including two rounds of tit-for-tat strikes this week. At the same time, Trump has also repeatedly talked up the prospects of a deal with Iran.
In the wake of his latest comments the price of Brent crude plunged to about $89 a barrel (£66), down 4.4% on the day.
Speaking to reporters, Trump said: “We have a deal that Iran will never have a nuclear weapon, which was the whole purpose of what we had to go through to get this. So, it's a very big thing.”
There will "probably be a signing, maybe in Europe" once the documents are finalised, he said - and it should be done "pretty quickly".
The documents are in "pretty final shape - so we'll see".
Trump also said the Strait of Hormuz would also open "as soon as we have it signed".
The US leader said he had spoken to leaders in the region, including Gulf allies and Israeli Prime Minister Benjamin Netanyahu, adding: "the whole Middle East is very happy".
The Israeli prime minister's office confirmed a conversation had taken place and said Israel "is not a party to the memorandum of understanding".
The statement said Netanyahu expressed appreciation for Trump's commitment to work towards a final agreement that included "the removal of enriched material, the dismantling of enrichment infrastructure, limits on missile production, and the cessation of Iran's support for its terrorist proxies in the region".
Iran's foreign ministry spokesperson Baghaei said the majority of the text for the memorandum had already been "finalised" but the US had made "excessive demands" and added "new requests".
He also maintained the country would not "depart from its red lines".
Hours earlier, Trump had said "the United States will be hitting Iran... very hard tonight" while threatening to seize Kharg Island and other oil infrastructure points "in the not too distant future".
Kharg Island in the north of the Gulf is Iran's main oil export terminal with about 90% of its oil exports passing through the island.
Trump also wrote the US would "assume total control" over the oil and gas markets "much like we have with Venezuela".
Iran's military threatened a retaliation "more severe than before", if there were further attacks against Iran.
"Considering recent US threats against Iran's oil infrastructure, either oil and gas exports are for everyone or they will be available for no-one," a statement said.
Iran's top negotiator Mohammad Bagher Ghalibaf also said that "wrong strategies and impulsive decisions will... create an endless quagmire that you will be stuck in for years".
The two countries exchanged strikes after a US Apache helicopter crashed in the Gulf on Monday.
On Wednesday the US Central Command (Centcom) said it completed a wave of strikes targeting military, surveillance and radar sites in southern Iran.
In response, Iran's Islamic Revolutionary Guard Corps (IRGC) said it launched strikes against American bases in Bahrain, Kuwait and Jordan. An 11-year-old girl in Bahrain was injured by an Iranian drone attack, local authorities said on Thursday, adding that homes and cars had been damaged.
Jordan said it shot down about 20 Iranian missiles and Kuwait's military said its military engaged with "hostile aerial targets".
Meanwhile India summoned a senior American diplomat after confirmation that three Indian sailors were killed in a US strike on a ship in the Gulf of Oman, which it accused of violating its blockade on Iranian ports. Twenty-one crew were rescued.
US forces have fired on nine vessels so far, including three this week. The blockade aims to stop ships from entering and leaving Iranian ports to restrict Tehran's ability to profit from oil exports.
The latest strikes prompted calls for de-escalation. A spokesperson for the UN Secretary-General António Guterres said on Thursday he was "deeply concerned by the continuing escalation in the Middle East".
“He urges the parties to return to the full implementation of the ceasefire and avoid any further deterioration.”
Pakistan, Russia, China, Turkey, India and Saudi Arabia also all called for de-escalation.
Source: BBC
— Agencies
