Palm Beach, US: President Donald Trump said Monday that "regime change" was effectively underway in Iran, while warning that if talks with Iranian figures contacted by the United States do not succeed, then bombing will continue.

Trump made clear talks were not with Iran's new supreme leader, Mojtaba Khamenei, but with people he described as "very reasonable," while so many top officials had already been killed in the conflict that "there's automatically a regime change."

If talks fail, he told reporters, "we'll just keep bombing our little hearts out."

Meanwhile, the price for a barrel of Brent crude fell 10.5% to $100.37, down from nearly $120 last week, after Trump said on his social media network that the United States and Iran held productive talks the last two days “regarding a complete and total resolution of our hostilities in the Middle East.”

The S&P 500 leaped 1.9% toward its best day since well before the war began following the step down in tensions, even though Iran denied there were any negotiations.

Iranian state television declared that the American leader had backed down “following Iran’s firm warning.”

The war, now in its fourth week, has already seen several dramatic turning points, the killing of Iran’s supreme leader, the bombing of a key Iranian gas field, and strikes targeting oil and gas facilities and other civilian infrastructure in Gulf Arab nations. The conflict has killed more than 2,000 people, shaken the global economy, sent oil prices surging, and endangered some of the world’s busiest air corridors.

Over the weekend, Trump had threatened to “obliterate” Iran’s power plants if it doesn’t open up the Strait of Hormuz within 48 hours. The strait has become a sore point for Trump because its near-closure by Iran has prevented oil tankers from leaving the Persian Gulf to supply customers around the world.

Trump said Monday that he is postponing attacks on Iranian power plants for five days to allow talks to continue. Still, caution remains, and the optimism in financial markets was measured. Shortly after Trump’s announcement — hours before his original deadline was set to expire — Iranian state television declared that the American leader had backed down “following Iran’s firm warning.” And a state-owned newspaper said Iran’s Foreign Ministry denied that any negotiations have taken place with the US.