US President Donald Trump has said he paused military strikes against Iran to give diplomatic negotiations another opportunity, while warning that the United States could resume expanded military operations if the talks fail.

The latest diplomatic efforts are focused on reaching an agreement that could facilitate the reopening of the Strait of Hormuz and pave the way for broader negotiations over a comprehensive nuclear deal.

The talks are being held primarily between Iran and Oman, with Qatar, Pakistan and Egypt also involved in mediation efforts alongside Trump's envoys, Steve Witkoff and Jared Kushner.

Speaking about the negotiations, Trump said there was only a narrow window for reaching an agreement.

“We are in very deep talks with Iran. If they don't work out, we will go back to very strong military action,” he said.

Asked how long he was prepared to allow the diplomatic process to continue, Trump replied: “Not much time. Either it goes fast or not at all.”

Trump said regional mediators and other partner nations had urged his administration to give diplomacy another chance before launching further attacks.

“All of the people that deal with Iran asked me: ‘Don't fire,’” he said.

The US president expressed confidence that Tehran was interested in reaching an agreement, describing the temporary suspension of military action as a calculated decision.

“Nothing gained, nothing lost,” Trump said.

He also noted that global oil prices fell while stock markets gained following the suspension of the attacks.

The pause marked the first time in two weeks that US military commanders were instructed to hold fire and refrain from carrying out planned strikes against Iranian targets along the country's southern coast and around the Strait of Hormuz.

The decision followed a high-level briefing during which military officials presented updated operational strike options. Although the administration had been leaning towards expanded military action earlier in the week, internal deliberations shifted towards a temporary pause to allow diplomatic efforts to progress.

Regional sources said the Oman-mediated discussions with Iran had made progress, although no final agreement had been reached.

Omani Foreign Minister Badr al-Busaidi held consultations with counterparts in Iran, Qatar, Saudi Arabia, Kuwait and Egypt. Official statements said the discussions focused on developing practical and sustainable arrangements to guarantee maritime safety through the Strait of Hormuz.

One proposal under consideration is a framework that would allow regional countries, including Iran and Oman, to collect reasonable service fees from vessels passing through the waterway to fund maritime security and environmental protection.

The proposal is modelled partly on arrangements used in the Strait of Malacca, where coastal states charge passing vessels for certain maritime services. Another option would see the revenue channelled into a joint fund administered with the participation of the International Maritime Organisation.

Meanwhile, Trump is expected to host Israeli Prime Minister Benjamin Netanyahu at the White House.

Speaking ahead of the meeting, Trump said he intended to discuss what he described as the threat posed by Iran's nuclear ambitions.

“I am going to talk to Bibi about the fact that if I weren't president, Iran would have had nuclear weapons by now and Israel would have been destroyed,” Trump said.