Iran and six major world powers reached a nuclear deal on Tuesday, capping more than a decade of negotiations with an agreement that could transform the Middle East, and which Israel called an "historic surrender".
Under the deal, sanctions imposed by the United States, European Union and United Nations would be lifted in return for Iran agreeing long-term curbs on a nuclear programme that the West has suspected was aimed at creating a nuclear bomb.
Reaching a deal is a major policy victory for both U.S. President Barack Obama and Iran's President Hassan Rouhani, a pragmatist elected two years ago on a vow to reduce the diplomatic isolation of a country of 77 million people.
But both leaders face scepticism from powerful hardliners at home after decades of enmity between nations that referred to each other as "the Great Satan" and a member of the "axis of evil".
While the main negotiations were between the United States and Iran, the four other U.N. Security Council permanent members Britain, China, France and Russia are also parties to the deal, as is Germany.
"All the hard work has paid off and we sealed a deal. God bless our people," an Iranian diplomat told Reuters on condition of anonymity ahead of the official announcement. Israeli Prime Minister Benjamin Netanyahu called the deal "a bad mistake of historic proportions".
"Iran will get a jackpot, a cash bonanza of hundreds of billions of dollars, which will enable it to continue to pursue its aggression and terror in the region and in the world," he said. "Iran is going to receive a sure path to nuclear weapons."
Israeli Deputy Foreign Minister Tzipi Hotovely called the deal an "historic surrender". She said on Twitter that Israel would "act with all means to try and stop the agreement being ratified", a clear threat to try to use its influence to block it in the Republican-controlled U.S. Congress.
Congress has 60 days to review the deal, and if it votes to disapprove of it, Obama can veto the rejection.
RELATED READING
Details of historic nuclear deal
It would require two thirds of lawmakers to override such a veto, which means some of Obama's fellow Democrats would have to rebel against one of the signature achievements of their president in order to kill the deal.
Final talks in Vienna involved nearly three weeks of talks between U.S. Secretary of State John Kerry and Iran's Foreign Minister Mohammad Javad Zarif, unprecedented between countries that have been enemies since Iranian revolutionaries stormed the U.S. embassy in Tehran in 1979 and took 52 Americans hostage.
For Obama, the diplomacy with Iran, begun in secret more than two years ago, ranks alongside his normalisation of ties with Cuba as landmarks in a legacy of reaching out to enemies that tormented his predecessors for decades.
Iran's hatred of the United States, a defining trait of its ruling system, was on display only last week, when it marked the end of the Ramadan fasting month with an annual day of protests, with crowds chanting "Death to Israel" and "Death to America".
Iran's IRNA news agency said billions of dollars in frozen funds would be released under the deal, and sanctions on its central bank, national oil company, shipping and airlines would be lifted.
It will retain the right to enrich some uranium, at an amount Western countries say keeps it from stockpiling enough to make a nuclear weapon, which it has always denied is its aim.
"SNAPBACK MECHANISM" FOR SANCTIONS
Western diplomats said under the final agreement, Iran had accepted a "snapback" mechanism, under which some sanctions could be reinstated in 65 days if it violated the deal.
A U.N. weapons embargo would remain in place for five years and a ban on buying missile technology would remain for eight years.
Alongside the deal, the United Nations nuclear watchdog, the International Atomic Energy Agency, announced an agreement with Iran on a roadmap to resolve its own outstanding issues with Tehran by the end of this year.
The main deal with the world powers depends on the IAEA being able to inspect Iranian nuclear sites and on Iran answering the watchdog's questions about possible military aims of previous research. The prospect of an agreement benefiting Iran is a worry to U.S. allies in the Middle East.
Tehran does not recognise Israel and supports its enemies. Arab states ruled by Sunni Muslims, particularly Saudi Arabia, believe that Shi'ite Muslim Iran supports their foes in wars in Syria, Yemen and elsewhere.
But there is also a strong reason for the United States to improve its relations with Iran, as the two countries face a common foe in Islamic State, the Sunni Muslim militant group that has seized swathes of Syria and Iraq. For Iran, the end of sanctions could bring a rapid economic boom by lifting restrictions that have drastically cut its oil exports and hurt its imports.
The prospect of a deal has already helped push down global oil prices because of the possibility that Iranian supply could return to the market. Oil prices tumbled more than a dollar on Tuesday after the deal was reached.
"Even with an historic deal, oil from Iran will take time to return, and will not be before next year, most likely the second half of 2016," Amrita Sen, chief oil analyst at London-based consultancy Energy Aspects, told Reuters.
"But given how oversupplied the market is with Saudi output at record highs, the mere prospect of new oil will be bearish for sentiment."
(Additional reporting by Shadia Nasralla; Writing by Peter Graff; editing by Anna Willard and Peter Millership)
