US Vice President JD Vance on Thursday told reporters that Washington was "not there yet" with Iran on an agreement but that the parties were close, adding that the U.S. was in a position where it could substantially set back Tehran's nuclear program.

The United States and Iran reached an agreement on Thursday to extend their ceasefire and lift restrictions on shipping through the Strait of Hormuz, pending U.S. President Donald Trump's approval, sources told Reuters.

Vance said there were a couple of sticking points in talks with Tehran concerning its enriched uranium stockpile and the question of enrichment.

"It's hard to say exactly when or if the president is going to sign the MOU. We're going back and forth on a couple of language points," Vance said.

"I can't guarantee that we're going to get there, but right now I feel pretty good about it," he said.