Trump warns Iran it has 'last chance' to reach nuclear deal with US

US President Donald Trump has warned Iran it has a "last chance" to reach an agreement with Washington, saying negotiations will continue after he again called off planned military strikes.

Speaking to reporters in the Oval Office on Monday, Trump said Persian Gulf allies had urged the United States to give diplomacy another opportunity.

"Many countries called. They all wanted to give this a last chance. This is a last chance,” Trump said.

Asked what had changed since previous rounds of talks, Trump replied: "I want to give them every last chance before decapitation."

According to the president, negotiations are expected to move quickly, with reopening the Strait of Hormuz forming what he described as the first phase of an agreement.

"It’s not very complex," Trump said, while acknowledging the administration still faces challenges in ending the months-long conflict.

Trump said the second phase would focus on Iran's denuclearisation, adding it would "take a little while."

He said both objectives were included in a memorandum of understanding signed by the United States and Iran in June.

Trump also said he was under no political pressure to speed up negotiations because he is not seeking re-election.

"If I’m given a chance to let a lot of people live, I want to give that chance. So I’m under no time constraint. You know, I don’t happen to be running, but a lot of very good Republicans are running," he said.