Trump says deal to end Iran war is close after calling off strikes

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 said 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 .