US Secretary of State John Kerry (right) shakes hands with Iran Foreign Minister Mohammad Javad Zarif at the UN Palace of Nations in Geneva. Photo: Reuters

Iran and six world powers clinched a deal yesterday curbing the Iranian nuclear programme in exchange for initial sanctions relief, signalling the start of a game-changing rapprochement that could ease the risk of a wider Middle East war.

Aimed at ending a long festering standoff, the interim pact between Iran and the United States, France, Germany, Britain, China and Russia won the critical endorsement of Iranian clerical Supreme Leader Ayatollah Ali Khamenei.

US President Barack Obama said the deal struck after marathon, tortuous and politically charged negotiations cut off Tehran’s possible routes to a nuclear bomb.

Halting Iran’s most sensitive nuclear work, its higher-grade enrichment of uranium, it was tailored as a package of confidence-building steps towards reducing decades of tension and ultimately create a more stable, secure wider Middle East.

Indeed, the US held previously undisclosed, separate direct talks with Iran in recent months to encourage diplomacy towards a nuclear deal, a senior US official said.

We need to start moving in the direction of restoring confidence

Washington and Tehran have lacked diplomatic relations and been locked in hostility since Iran’s 1979 Islamic Revolution.

So détente between the two – opposed by Washington’s Israeli and Saudi allies – could reshape Middle East geo-politics.

EU foreign policy chief Catherine Ashton, who has been coordinating diplomatic contacts with Iran on behalf of the major powers, said the accord created time and space for follow-up talks on a comprehensive solution to the dispute.

“This is only a first step,” said Iranian Foreign Minister and chief negotiator Mohammad Javad Zarif.

“We need to start moving in the direction of restoring confidence, a direction which we have managed to move against in the past.”

Downtrodden by sanctions, many Iranians expressed joy at the breakthrough and prospect of economic improvement. Iran’s rial currency, decimated earlier this year due to sanctions, jumped more than three per cent on news of the deal yesterday.

Obama said that if Iran did not meet its commitments during the six-month period covered by the interim deal, Washington would turn off the tap of sanctions relief and “ratchet up the pressure”.

“There are substantial limitations which will help prevent Iran from building a nuclear weapon,” he said in a late-night appearance at the White House after the deal was sealed.

“Simply put, they cut off Iran’s most likely paths to a bomb.”

Big power foreign ministers seemed relieved and elated after Ashton read out a statement proclaiming the deal in the middle of the night at the UN office in Geneva.

Ashton and US Secretary of State John Kerry hugged each other. Kerry and Russian counterpart Sergei Lavrov shook hands. Minutes later, as Iran’s delegation posed for photos, Zarif and French Foreign Minister Laurent Fabius embraced.

France had taken the hardest line on Iran in recent talks.

The West has long suspected that Iran has been seeking covertly to develop a nuclear weapons capability. The Islamic Republic, a major oil producer, denies that, saying its nuclear programme is a peaceful quest for an alternative source of electricity to serve a rapidly expanding population.