Washington DC - President Donald Trump withdrew his threat to launch a more devastating wave of bombings against Iran on Thursday and promised instead that he would soon be able to announce the signing of a deal with Tehran to end the war.

As the World Cup opening ceremony got underway in Mexico, Trump posted news of a potential breakthrough, triggering a stock market rally and sending oil prices tumbling on hopes that Gulf exports could soon return to normal.

"Based on the fact that discussions with the Islamic Republic of Iran have been brought to the highest level of Iranian leadership and approved, I have... cancelled the scheduled strikes and bombings against Iran this evening," Trump posted.

"Time and place of the signing to be announced shortly," he promised, after explaining that the finer points of the arrangement had been approved by the US and its allies in the region, including Israel, with which Washington jointly launched the war in February.

Donald Trump Trump names new Director of National Intelligence, encourages early confirmation

There was no immediate official reaction from Iran, but the Fars news agency said that an informed source close to Tehran's negotiating team had said: "No text has been approved for a preliminary memorandum of understanding with the United States."

The Tasnim news agency noted that Trump had already announced a deal was imminent 38 times in the previous two months and warned: "Until Iran announces the matter of a potential understanding, any news from Trump on this subject should be regarded the same as his previous messaging."

Markets had been nervous that the latest exchanges of threats and missile fire across the Gulf would further disrupt the global economy, and the World Bank had earlier in the day revised down its global growth forecast to a level not seen since the coronavirus pandemic.