Iran and six world powers agreed Thursday on the framework of a potentially historic deal aimed at curbing Tehran's nuclear drive, marking a major breakthrough in a 12-year standoff after marathon talks in Switzerland.

The framework, agreed between Iran and the West -- which has long feared Tehran wants to build a nuclear bomb -- raised hopes the deal could help stability in the Middle East.

US President Barack Obama welcomed the "historic understanding" with the Islamic republic after decades of hostility, but cautioned that more work needed to be done.

"If Iran cheats, the world will know it," he said in a televised address from the White House.

Under the framework, Iran agreed to sharply curtail its nuclear programme in return for the lifting of sanctions that have crippled the country's economy.

Hundreds of Iranians took to the streets of Tehran in celebration after the agreement was announced, with drivers sounding their horns in approval along the capital's longest street, Val-e-Asr Avenue.

But Iran's arch-foe Israel said it would increase the risks of nuclear proliferation and of "a horrific war", with Israeli Prime Minister Benjamin Netanyahu telling Obama the deal "would not block Iran's path to the bomb. It would pave it," according to an Israeli spokesman.

The main outlines agreed after eight days of talks that sometimes went through the night in the Swiss city of Lausanne now have to be finalised in a highly complex agreement by June 30.

Failure may set the United States and Israel on a road to military action to thwart Iran's nuclear drive and keep Tehran out in the cold on the international stage.

- 'Big day' -

US Secretary of State John Kerry hailed a "big day", while Iranian President Hassan Rouhani said the drafting of a full accord would begin immediately with the aim of completing it by the June 30 deadline.

EU foreign policy chief Federica Mogherini said the United States and the EU will lift all nuclear-related sanctions on Iran once the UN atomic agency has verified that Tehran has stuck to the ground-breaking deal.

And the US said all past UN nuclear resolutions on Iran would also be lifted.

Kerry said Iran's stocks of highly enriched uranium will be cut by 98 percent for 15 years, while its unfinished Arak reactor will not produce weapons-grade plutonium.

The Fordo facility, built deep into a mountain, will remain open, however will not be used for enrichment but for research and development.

The deal will also see Iran reduce by roughly two-thirds -- to 6,104 from around 19,000 -- the number of uranium centrifuges, which can make fuel for nuclear power but also the core of a nuclear bomb.

Iranian negotiators had been under pressure from domestic hardliners not to give too much away while also delivering on Rouhani's promise to win the lifting of sanctions.

The so-called P5+1 group -- the United States, Britain, China, France and Russia plus Germany -- hope that the deal will make it virtually impossible for Iran to make nuclear weapons.

Iran, one of the world's major oil producing countries, has always denied seeking the atomic bomb, saying its activities are for energy generation and research.

- 'Sanctions can be reimposed' -

France, which has taken a hawkish line during the negotiations, warned that sanctions could be reimposed if Tehran does not fully keep its side of the bargain.

"Sanctions that are lifted can be reimposed if the deal is not applied," President Francois Hollande's office said in a statement, adding that Paris would watch closely to ensure a "credible" and "verifiable" final agreement that prevents Iran from developing a nuclear weapon.

German Chancellor Angela Merkel said the international community had never "been so close to an agreement preventing Iran from having nuclear weapons".

Russia, which built Iran's nuclear power plant, hailed the deal as a recognition of Tehran's "unconditional right" to pursue a civilian nuclear programme.

"A comprehensive, negotiated solution to the Iranian nuclear issue will contribute to peace and stability in the region and enable all countries to cooperate urgently to deal with the many serious security challenges they face," UN chief Ban Ki-moon said in a statement.

The Russian foreign ministry also said the framework deal would have "a positive impact" on the security situation in the Middle East.

Successful implementation of the deal could put Iran and the United States on the road to better relations after 35 years of animosity since the 1979-1981 hostage crisis in Tehran.

US analyst Daryl Kimball of the Arms Control Association said the parameters agreed so far could "lead to one of the most consequential and far reaching nuclear nonproliferation achievements in recent decades".

Obama needs a deal which he can sell to hostile Republicans in Congress, who remain suspicious of Iran's pledges and are threatening to push for new sanctions from April 14.

Republicans and US allies like Israel and Saudi Arabia fear that if too much of Iran's nuclear programme is left intact, it will still have the ability to obtain an atomic bomb.

Crude oil prices fell in New York after the framework accord was announced, with the US benchmark West Texas Intermediate for May delivery down 95 cents to $49.14 a barrel.

Who said what as West sealed historic nuclear Iran deal
Lausanne (AFP) April 2, 2015 - Iran and global powers sealed a deal Thursday on plans to curb Tehran's chances for getting a nuclear bomb, laying the ground for a new relationship between the Islamic republic and the West.

Though the agreement was hailed as a major breakthrough in a 12-year standoff between Iran, Europe and the United States, world leaders couched their reactions, underlining a lack of trust in Tehran and scepticism in some quarters that the hard-fought deal could stay standing.

Here are some of the quotes from the main protagonists in the talks between Iran and P5+1, made up of the United States, Britain, France, China, Russia and Germany:

- Obama cheers historic deal, warns Iran -

"I am convinced that if this framework leads to a final comprehensive deal, it will make our country, our allies and our world safer," said US President Barack Obama.

While he cheered the "historic understanding" and told sceptical hardliners the diplomatic solution to the standoff was the "best option by far", he admitted there was a risk Tehran would not hold up its end of the bargain.

But "if Iran cheats, the world will know it," he said.

- Zarif hails thawed Iran-West relations -

Iranian Foreign Minister Mohammad Javad Zarif hailed a thawing in US-Iran relations, saying the deal brought to an end a negative "cycle that was not in the interest of anybody" and showed "true dialogue and engagement with dignity" meant "we can resolve problems, open new horizons and move forward."

- Hammond: 'More than we hoped for' -

"This is well beyond what many of us thought possible even 18 months ago", British Foreign Secretary Philip Hammond said, adding that while "we will continue to have our differences on many other issues with Iran," the deal will crucially "avoid a nuclear arms race in the region."

- Russia defends Iran's rights -

"This deal contains the principal put forward by Russian President Vladimir Putin, which is Iran's unconditional right to a peaceful nuclear programme," the Russian foreign ministry said.

- Kerry: world safer -

US Secretary of State John Kerry said diplomacy had paid off, insisting that "simply demanding that Iran capitulate makes a nice sound bite, but it's not a policy."

Admitting the United States "remains deeply concerned about Iran's destabilising the region", he said the test now would be "whether or not it will leave the world safer or more securer than it would be without this agreement."

- Merkel: closest deal in history -

German Chancellor Angela Merkel acknowledged the sweat, blood and tears that had gone into clinching the deal, saying the international community had never "been so close to an agreement preventing Iran from having nuclear weapons".

- Ban Ki-moon sees boost in Mideast cooperation -

UN Secretary-General Ban Ki-moon said it will pave the way to bolstering "peace and stability" in the Middle East and allow cooperation on the "many serious challenges (countries) face" in the region.

- France wary -

While French Foreign Minister Laurent Fabius embraced the accord as "unquestionably positive" in parts, President Francois Hollande's office warned "sanctions that are lifted can be re-imposed if the deal is not applied," and called for a "verifiable" final agreement on Iran's progress.

- Israel: 'Historic mistake' -

Israel's Prime Minister Benjamin Netanyahu, who had been violently urging the West not to sup with Iran, even with a long spoon, did not immediately react to the announcement.

An Israeli government source, however, slammed the accord as a "historic mistake."

Israel, widely believed to have the bomb itself, has said a bad deal would endanger the country.