Washington: US President Donald Trump on Monday said Iran has committed to permanently forgoing nuclear weapons under a newly announced agreement between Washington and Tehran, while also rejecting reports that the United States would provide hundreds of millions of dollars to Iran as part of the arrangement.

In a post on Truth Social, Trump described reports claiming the US would pay Iran USD 300 million as part of the deal as inaccurate and politically motivated. He also reaffirmed that preventing Iran from acquiring a nuclear weapon remains the cornerstone of the agreement.

"Iran has agreed to never have a Nuclear Weapon! Also, the story that the US is paying Iran 300 million Dollars is Fake News, put out by the Dumocrats!!!"

The remarks came as US officials outlined details of a memorandum of understanding that establishes a framework for future relations between the two countries and links economic incentives to Iran's compliance with nuclear monitoring requirements and regional security commitments.

Framework ties sanctions relief to compliance

Senior administration officials said the memorandum creates a performance-based system under which sanctions relief and broader economic engagement would depend on Iran's cooperation with international verification measures and its actions across the region.

According to officials, Tehran's willingness to allow inspections, demonstrate that it is not pursuing a nuclear weapons programme and refrain from supporting extremist activities would determine the extent of future economic benefits.

"The more that the Iranians are willing to work with us on their nuclear program, on verifying that they're not building a nuclear weapon, on not funding radicalism and terrorism in the region, the more that they're going to be welcomed into the world economy through a combination of sanctions relief and other economic measures," administration officials said.

The agreement is expected to be formally signed later this week in Geneva, with Switzerland helping coordinate the process alongside the United States, Iran, Pakistan and Qatar.

Trump has previously described the accord as a "very powerful document" and indicated that its full contents will be made public after the signing ceremony.

Vance praises Trump's diplomatic efforts

Vice President JD Vance echoed the president's comments, saying the agreement reflected Trump's longstanding commitment to preventing Iran from obtaining nuclear weapons.

In a video posted on X, Vance credited the president's diplomatic efforts with advancing peace and stability in the region despite political opposition.

"The President has been clear from day one: Iran will never have a nuclear weapon. Once again, President Trump's efforts to establish peace have paid off for the American people, despite countless attempts to thwart it by people who hate America and President Trump."

Vance has previously stated that sanctions relief would be contingent upon Iran taking verifiable steps to dismantle enriched uranium stockpiles and accepting a comprehensive inspection regime.

Netanyahu vows Iran will never obtain nuclear arms

Israeli Prime Minister Benjamin Netanyahu also reiterated Israel's long-standing opposition to any Iranian nuclear weapons capability, regardless of the outcome of diplomatic negotiations.

Speaking on the issue, Netanyahu said preventing Iran from becoming a nuclear-armed state had been a defining objective throughout his political career.

"For decades, I have been fighting Iran's efforts to acquire nuclear weapons. I can define this as my life's mission. I have upheld it until now, and I will uphold it in the future as well."

He added that Israel would continue to oppose any attempt by Tehran to develop nuclear weapons.

"With or without a deal, Iran will not have nuclear weapons. Not today, and not tomorrow. As long as I am Prime Minister of Israel, this will not happen."

Strait of Hormuz shipping resumes

Trump also announced that maritime traffic had resumed through the Strait of Hormuz, one of the world's most strategically important energy corridors, following the broader agreement aimed at ending months of conflict in the Middle East.

"Ships are starting to move, many loaded up with Oil, out of the Strait of Hormuz," Trump said, adding later that he did not "think we will need much help" keeping the waterway open.

Iranian media reported that several vessels, including oil tankers and cargo ships, had successfully passed through the strait after months of disruption.

The waterway had been effectively closed since the conflict began earlier this year, contributing to sharp increases in global oil prices and renewed concerns about inflation and energy security. The United States had also imposed restrictions on shipping connected to Iranian ports during the conflict.

Markets react positively to peace deal

Financial markets responded positively to news of the agreement and the anticipated reopening of the Strait of Hormuz, a route through which roughly one-fifth of the world's oil supply normally passes.

Oil prices fell sharply as traders anticipated improved energy flows and reduced geopolitical risks. Crude, which had surged above USD 110 per barrel during the conflict, dropped nearly five per cent towards USD 80 following the announcement.

Global equity markets also rallied, with major US stock indices posting gains as investors welcomed signs of de-escalation and greater stability in energy markets.

Officials from the United States, Iran and Pakistan said the peace agreement is scheduled to be signed in Switzerland on Friday, marking what could become a significant turning point in relations between Washington and Tehran after months of military confrontation and economic uncertainty.

(With inputs from agencies)