Washington DC - President Donald Trump on Thursday announced a "great settlement" to end the war with Iran, saying he expected a deal to be signed in Europe as soon as this weekend.

"We just made a great settlement of the war with Iran," Trump told reporters in the Oval Office.

The two sides would, "subject to finalization of documents, which should get done over the next few days, probably have a signing, maybe in Europe," with Vice President JD Vance representing the US.

The president's claim came just hours after he promised fresh strikes against Iran before suddenly calling them off.

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There has been no confirmation from Iran, and Trump revealed few concrete details about what each side had agreed to.

Trump did say he believed Iranian supreme leader Mojtaba Khamenei had personally approved the deal because the country had "taken a pounding."

He also claimed that, as part of the deal, Iran would agree to never have or purchase a nuclear weapon, and that the Strait of Hormuz – a crucial waterway for the flow of oil which Iran claims to have shuttered – would open.

Trump concluded that "The whole Middle East is happy, and long beyond the Middle East," even though his war has caused global oil prices to spike, with inflation hitting a three-year high in the US.