TEHRAN (AFP) — The United States and Iran could strike a deal to end the Middle East war as early as Sunday, Washington's top diplomat said, while Tehran insisted the agreement would do nothing to limit its nuclear program.

Washington and Tehran have observed a ceasefire since 8 April while mediators push for a negotiated settlement, although Iran has imposed controls on Gulf shipping and the US has blockaded Iran's ports.

On Sunday, during a visit to India, US Secretary of State Marco Rubio told reporters: "I do think perhaps there is the possibility that in the next few hours the world will get some good news."

This came after US President Donald Trump posted on social media that the deal "has been largely negotiated, subject to finalization between the United States of America, the Islamic Republic of Iran, and the various other countries."

Rubio said the agreement would start a "process that can ultimately leave us where the president wants us to be, and that is a world that no longer has to fear or worry about an Iranian nuclear weapon."

Trump's post stressed that the Strait of Hormuz would be reopened, a development that would bring relief to energy markets after a long Iranian blockade of a crucial waterway that in peacetime carries a fifth of world oil exports.

Iranian officials confirmed the existence of a draft agreement, but stressed that — contrary to earlier long-standing US demands — talks on the issue of Iran's contested nuclear program have been deferred for 60 days after any deal.

According to Iran's Fars news agency, Washington has agreed to release part of Tehran's funds frozen abroad under international economic sanctions and to end its naval blockade of ships traveling to and from Iranian ports.

In exchange, "according to this draft, passage through the Strait of Hormuz would return to pre-war levels under Iranian management."

And, Fars said, "sanctions on oil, gas, petrochemicals and their derivatives would be temporarily lifted during the negotiation period."