Donald Trump has postponed strikes on power plants in Iran for at least five days.
The US president said the two countries had entered talks on a “complete and total resolution” of hostilities.
On Saturday night, Mr Trump set a deadline of 48 hours for Iran to reopen the Strait of Hormuz or face attacks on energy facilities.
The threat prompted Iran to publish a list of retaliatory targets, including a nuclear plant that powers Dubai and Abu Dhabi.
In a post on Truth Social on Monday, Mr Trump said: “I am pleased to report that the USA, and the country of Iran, have had, over the last two days, very good and productive conversations regarding a complete and total resolution of our hostilities in the Middle East.
“Based on the tenor and tone of these in-depth, detailed, and constructive conversations, which will continue throughout the week, I have instructed the department of war to postpone any and all military strikes against Iranian power plants and energy infrastructure for a five-day period, subject to the success of the ongoing meetings and discussions.”