U.S. President Donald Trump said Wednesday that Iran had agreed not to possess nuclear weapons, signaling potential progress in talks, as Tehran confirmed it is reviewing a U.S. proposal to end the war despite unresolved key demands.

"Look and this is very simple. Iran cannot have a nuclear weapon because as tough as they are, we want to keep them alive. We want to keep all of you alive," he told reporters at the White House.

"Iran cannot have a nuclear weapon, and they won't, and they've agreed to that, among other things. We've had very good talks over the last 24 hours, and it's very possible that we'll make a deal."

He added that Tehran had also agreed on other points, but did not provide further details.

Earlier, Iranian Foreign Ministry spokesman Esmail Baghai played down reports suggesting an agreement was close, calling them exaggerated.

Another spokesperson cited Iran's ISNA news agency said Tehran would convey its response to Pakistan.

Earlier in the day, Trump had sounded more pessimistic about the chances of a deal. In a Truth Social post, he threatened to restart the U.S. bombing campaign in Iran, calling the possibility of Tehran agreeing to the latest U.S. proposal a "big assumption."

Trump has repeatedly played up the prospect of an agreement that would end the war that started Feb. 28, so far without success.

The two sides remain at odds over a variety of difficult issues, such as Iran's nuclear ambitions and its control of the Strait of Hormuz, which before the war handled one-fifth of the world's oil and gas supply.

A Pakistani source and another source briefed on the mediation said an agreement was close on a one-page memorandum that would formally end the conflict. That would kick off discussions to unblock shipping through the strait, lift U.S. sanctions on Iran and set curbs on Iran's nuclear program, the sources said.

It was unclear how the memorandum differs from a 14-point plan ⁠proposed ⁠by Iran last week, and Iran has yet to respond to the latest U.S. proposal.

Iran's semi-official Tasnim news agency, citing an unnamed source, said the U.S. proposal contained some unacceptable provisions, without specifying which ones.

Iranian lawmaker Ebrahim Rezaei, a spokesperson for parliament's powerful foreign policy and national security committee, described the text as "more of an American wish-list than a reality."

"The Americans will not gain anything in a war they are losing that they have not gained in face-to-face negotiations," he wrote on social media.

Oil prices tumble

Reports of a possible agreement caused global oil prices to tumble to two-week lows, with benchmark Brent crude futures falling around 11% to around $98 a barrel at one point before rising back above the $100 mark.

Global share prices also leapt and bond yields fell on optimism about an end to ⁠a war that has disrupted energy supplies. Trump on Tuesday paused a two-day-old naval mission to reopen the blockaded strait, citing progress in peace talks.

The U.S. military has kept up its own blockade on Iranian ships in the region. U.S. Central Command said forces fired at an unladen Iranian-flagged tanker on Wednesday, disabling the vessel as it attempted to sail toward an Iranian port in violation of the blockade.

No mention of key US demands

The source briefed on the mediation said the U.S. negotiations were being led by Trump's envoy Steve Witkoff and son-in-law Jared Kushner. If both sides agreed on the preliminary deal, that would start the clock on 30 days of detailed negotiations to reach a full agreement.

The full agreement would ⁠end the competing U.S. ‌and Iranian blockades ‌on the strait, lift U.S. sanctions and release frozen Iranian funds. It would also include some ⁠curbs on Iran's nuclear programme, with the aim of a pause or moratorium on Iranian ‌enrichment of uranium.

While the sources said the memorandum would not initially require concessions from either side, they did not mention several key demands Washington has made in the past, which Iran has rejected, such as curbs on ⁠Iran's missile program and an end to its support for proxy militias in the Middle East.

The sources ⁠also made no mention of Iran's existing stockpile of more than 400 kg (900 pounds) of near-weapons-grade uranium.

Israeli Prime Minister Benjamin Netanyahu, Trump's ally against ⁠Iran, said on Wednesday the two leaders agreed that all enriched uranium must be removed from Iran to prevent it from developing a nuclear bomb.

Tehran denies wanting to acquire a nuclear weapon.