Iran's Tasnim news agency, citing an Iranian official, said that the strait of Hormuz will not return to pre-war conditions and energy markets will remain unsettled, adding that no negotiations with the US are under way.

Tasnim said US President Donald Trump backed down from attacking critical Iranian infrastructure amid financial market pressure, warning Tehran would continue to defend itself until it achieves deterrence.

Trump said on Monday he had given orders to postpone any military strikes against Iranian power plants for five days, hours ahead of a deadline that threatened further escalation in the conflict now in its fourth week.

Trump said in a post on his Truth Social platform that the US and Iran had had "VERY GOOD AND PRODUCTIVE" conversations over the past two days about a "COMPLETE AND TOTAL RESOLUTION OF HOSTILITIES IN THE MIDDLE EAST".

In his message, written entirely in capital letters, he said he had instructed the defence department to postpone the strikes pending the outcome of the talks.

However, Iran's Fars news agency said after Trump's post that there was no direct communication with the US or through intermediaries.

Citing an unnamed source, Fars said Trump had retreated after hearing that Iran would respond by attacking all power plants in the region.

A source briefed on Israel's war plans said Washington had kept it informed of its talks with Tehran, and that Israel was likely to follow Washington in suspending any targeting of Iranian power plants and energy infrastructure.

The prime minister's office did not immediately respond to a request for comment on US talks with Iran or Washington's decision to hold off on striking some Iranian targets.