The United States and Iran are to launch talks on a final settlement to their conflict on Friday in Switzerland, officials said, as news that the Strait of Hormuz will reopen sent world oil prices tumbling.

Negotiations over a final deal are to start immediately after a signing ceremony and continue during a 60-day window, leading to decisions on the fate of Iran's nuclear programme and a plan for the lifting of international economic sanctions.

Optimism that the war triggered by the February 28 US-Israeli strikes on Tehran might be coming to an end was dented, however, by fresh Israeli strikes on south Lebanon.

Iran's central military command, Khatam al-Anbiya, warned that Israel should "await a harsh response" to the strikes, which Lebanon's state news agency said targeted two vehicles in the town of Mayfadoun and another in nearby Shukeen, near the town of Nabatieh in southern Lebanon, killing four.

The Israeli military said it conducted a strike after it "identified a suspicious vehicle" near where its soldiers were operating and that its forces intercepted several rockets and carried out an air strike against a launcher.

Friday's signing ceremony will take place at Switzerland's mountainside Burgenstock resort, perched high above Lake Lucerne, the Swiss foreign ministry said.

According to a senior US official, speaking on condition of anonymity, the framework agreement has already been signed electronically by President Donald Trump, Vice President JD Vance, Iran's deputy foreign minister Majid Takht-Ravanchi and top negotiator Mohammad Bagher Ghalibaf.

"Likely on Friday... a new round of negotiations between Iran and the United States to reach a final agreement will begin," Iranian Foreign Minister Abbas Araghchi said. "In the final agreement, decisions will be made on the nuclear issues and the lifting of sanctions."

He also warned that the deal would require Israel to withdraw from Lebanon – a condition Israel has already rejected.

“Without the withdrawal of Israeli forces from the territories they occupied during this war, the war has not fully come to an end,” Araghchi said.

A US official, who spoke on condition of anonymity to discuss outlines of the agreement, has said the deal does not call for an Israeli withdrawal. And Israeli Prime Minister Benjamin Netanyahu had on Monday said that Israel would remain in Lebanon “as long as necessary.”

Meanwhile, optimism over the reopening of Hormuz has sent the price of the international benchmark Brent North Sea crude tumbling 5.1 percent to just under US$79 a barrel. The main US oil contract, West Texas Intermediate, dropped 5.8 percent to slightly over US$76 a barrel.

The US had, in retaliation for Iran's action, imposed its own blockade on Iranian ports. But Iranian state television said Iranian tankers had resumed shipping following the deal, as Takht-Ravanchi said the US blockade "has been lifted prior to the formal signing".

Sporadic episodes of violence since an April ceasefire had threatened a deal, but weeks of indirect negotiations mediated by Pakistan and Qatar built momentum for an interim deal.

Yet a comprehensive agreement on Iran's nuclear ambitions and Western sanctions remains elusive.

The US and Israel are pressing to strip Iran of its stockpile of highly enriched uranium, said to have been buried by US strikes last year, while Iran has insisted on its right to enrichment.

The agreed framework has however paved the way for talks on those key disputes.

In a flurry of interviews to talk up the deal, Vance said no US taxpayer money would go to Iran under the deal, as Iranian media reported US$12 billion of frozen assets would be released.

Vance told NBC that nuclear inspectors would also be allowed to enter Iran.

Trump, meanwhile, has said he’s open to sending the emerging agreement to the US Congress for review.

Speaking on the sidelines of the Group of Seven summit in the French Alps, Trump said, “I like the idea, send it to Congress please.” He added, “I mean who wouldn’t approve it.”

Republicans on Capitol Hill say they want Trump to provide more information about the agreement, with some expressing skepticism that the deal can deter Iran from pursuing a nuclear weapon. (Agencies)



Edited by Cecil Wong