Iranians celebrated in the streets after negotiators reached a framework for a nuclear accord and U.S. President Barack Obama hailed an "historic understanding", but senior global diplomats cautioned that hard work lies ahead to strike a final deal.
The tentative agreement, struck on Thursday after eight days of talks in Switzerland, clears the way for a settlement to allay Western fears that Iran could build an atomic bomb, with economic sanctions on Tehran being lifted in return.
It marks the most significant step toward rapprochement between Washington and Tehran since the 1979 Iranian revolution and could bring an end to decades of Iran's international isolation.
But the deal still requires experts to work out difficult details before a self-imposed June deadline and diplomats said it could collapse at any time before then.
"We are not completely at the end of the road and the end of the road should be in June,” said French Foreign Minister Laurent Fabius. "Nothing is signed until everything is signed, but things are going in the right direction."
Israeli Prime Minister Benjamin Netanyahu, who has the ear of U.S. Republicans who control both houses of Congress, said the powers negotiating with Iran must add a new demand that Tehran recognize Israel's right to exist.
Under Thursday's terms, Iran would cut back its stockpiles of enriched uranium that could be used to make a bomb and dismantle most of the centrifuges it could use to make more. Intensive international inspections would prevent it from violating the terms in secret. Washington said the settlement would extend the "breakout time" needed for Iran to make a bomb to a full year, from 2-3 months now.
For Iran, it would eventually lead to the end of sanctions that have cut the oil exports that underpin its economy by more than half over the past three years.
Still, decades of hostility remain between countries that have referred to each other as "the Great Satan" and part of the "axis of evil". Obama and Iranian President Hasan Rouhani, who both took risks to open the dialogue, will each have to sell the deal to skeptical conservatives at home.
U.S. Republicans have demanded that the Congress they control be given the right to review the deal.
"America beneath our feet"
Celebrations erupted in the Iranian capital after the deal was reached. Cars in Tehran honked horns as passengers clapped.
On Friday, conservative clerics signaled their support, including Ayatollah Ali Khamenei, the supreme leader, whose authority exceeds that of the elected president, Rouhani.
In the weekly sermon at Tehran University, Ayatollah Mohammad Emami-Kashani, a 78-year-old hardline cleric, said Khamenei backed the negotiating team. Emami-Kashani praised the negotiators as "firm, wise and calm" and congratulated Rouhani and Foreign Minister Mohammad Javad Zarif.
Still, he spoke from behind a podium with a saying from the leader of Iran's revolution, Ayatollah Ruhollah Khomeini, which read: "We will put America beneath our feet".
Iran would uphold its commitments only if the West did, he said: "If you break a promise, then Iran will break its promise."
Obama described the agreement as an "historic understanding with Iran". He compared it with nuclear arms control deals struck by his predecessors - including Republicans - with the Soviet Union that "made our world safer" during the Cold War. He also cautioned, however, that "success is not guaranteed".
Israel demands that any final agreement with Iran will include a clear and unambiguous Iranian commitment of Israel's right to exist" -- Israeli Prime Minister Benjamin Netanyahu
With Russia and China joining the United States, Britain, France and Germany as signatories to the deal, and even Iran's Sunni Arab enemies cautiously welcoming it, the only country that was publicly opposed was Israel.
Netanyahu fumed against an arrangement he said could lead to nuclear proliferation and war.
"Israel demands that any final agreement with Iran will include a clear and unambiguous Iranian commitment of Israel's right to exist," he said in a statement on Friday.
Earlier Netanyahu expressed his vehement opposition in a phone call to Obama. In a statement released after the conversation, he said a deal based on the framework announced in Lausanne "would threaten the survival of Israel".
"This deal would legitimize Iran's nuclear program, bolster Iran's economy and increase Iran's aggression and terror throughout the Middle East and beyond," he said. "It would increase the risks of nuclear proliferation in the region and the risks of a horrific war."
Iran's other main foe in the region, Saudi Arabia, was more cautious, supporting the agreement in public, although its mistrust remains deep. It launched a bombing campaign a week ago against Iranian allies in Yemen.
Germany's Foreign Minister Frank-Walter Steinmeier said it was too early to celebrate. But he also said Israel should study the deal more closely before opposing it.
Global oil prices, which have already fallen sharply in the past year, tumbled on Thursday on the prospect that Iran will eventually be able to restore its exports. Brent crude was off as much as 5 percent at one point before recovering.
France's Fabius said Iran's economy stood to gain $150 billion in relief from the sanctions.
"You will have seen that there was a lot of positive reaction in the streets in Iran, and I think it’s real, not fabricated. The Iranians, the people, the youth are expecting something and that should be noted,” he said.
Saudi Arabia's new ruler, King Salman, told Obama by phone on Thursday that he hoped a final settlement of the nuclear dispute would "strengthen the stability and security of the region and the world".
However, the Saudis and other Sunni Arab states are concerned about the wider implications of a deal that benefits Iran, the leading Shi'ite Muslim power, which they see as a rival trying to expand its influence.
A Gulf source close to official Saudi thinking said the deal seemed to include valuable safeguards: "It's about verification. If they don't comply, the boycott will be reimposed. This is a reassuring result."
But he added a skeptical note: "Iran may think that as a result of this accord it is on the road to respectability."