US President Donald Trump said Washington and Tehran have signed a preliminary agreement to end the Gulf war and reopen the Strait of Hormuz, though details remain uncertain, reported Reuters.

The deal extends an April ceasefire by 60 days and allows shipping through the strait, which Iran had blocked since February. Trump said Vice President JD Vance will attend a formal signing in Geneva on Friday. Oil prices fell to their lowest since March after the announcement.

Iranian President Masoud Pezeshkian called the memorandum an "important step" but noted a permanent truce has yet to take shape. Vance described the document as only 1-1/2 pages, with details to be released later. He said it includes significant sanctions relief for Iran.

US officials said Iran could gain economic benefits through lifted sanctions, unfreezing assets and a US$300 billion reconstruction fund financed by Gulf states. In return, Iran must pledge never to build nuclear weapons and cut support for militias such as Hezbollah.

The agreement does not resolve Iran's enriched uranium stockpile. Iranian officials said they conceded little by resuming nuclear talks interrupted in February when Trump launched strikes with Israel.

Israel remains a sticking point. Prime Minister Benjamin Netanyahu said forces will stay in southern Lebanon despite Iran's demand for withdrawal. Fighting has eased but not stopped, with Israeli drone strikes reported in Kfar Tebnit.

Iranian Foreign Minister Abbas Araqchi insisted Israeli attacks must cease. Privately, Israeli officials described the deal as "terrible for Israel." The memorandum leaves key issues unresolved, including Lebanon and Iran's nuclear programme.

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