Iran and six world powers agreed Thursday on the framework of a potentially historic deal aimed at curbing Tehran’s nuclear drive after marathon talks in Switzerland.

It marks a major breakthrough in a 12-year standoff between Iran and the West — which has long feared Tehran wants to build a nuclear bomb — and raised hopes the deal could help stability in the Middle East.

US President Barack Obama welcomed the “historic understanding” with the Islamic republic after decades of hostility but cautioned that more work needed to be done.

“If Iran cheats, the world will know it,” he said in a televised address from the White House.

Under the framework, Iran agreed to sharply curtail its nuclear programme in return for the lifting of sanctions that have crippled the country’s economy.

Hundreds of Iranians took to the streets of Tehran in celebration after the agreement was announced, with drivers sounding their horns in approval along the capital’s longest street, Val-e-Asr Avenue.

But Iran’s arch-foe Israel branded the deal a “historic mistake”.

The main outlines agreed after eight days of talks that sometimes went through the night in the Swiss city of Lausanne now have to be finalised in a highly complex agreement by June 30.

Failure may set the United States and Israel on a road to military action to thwart Iran’s nuclear drive and keep Tehran out in the cold on the international stage.

– ‘Big day’ –

US Secretary of State John Kerry hailed a “big day” while Iranian President Hassan Rouhani said the drafting of a full accord would begin immediately with the aim of completing it by the June 30 deadline.

EU foreign policy chief Federica Mogherini said the United States and the EU will lift all nuclear-related sanctions on Iran once the UN atomic agency has verified that Tehran has stuck to the ground-breaking deal.

And the US said all past UN nuclear resolutions on Iran would also be lifted.

Kerry said Iran’s stocks of highly enriched uranium will be cut by 98 percent for 15 years while its unfinished Arak reactor will not produce weapons-grade plutonium.

The Fordo facility, built deep into a mountain, will remain open but will not be used for enrichment but for research and development.

Iranian media said the deal will include Iran slashing by two-thirds — to 6,000 from 19,000 — the number of centrifuges, which can make fuel for nuclear power but also the core of a nuclear bomb.

Iranian negotiators had been under pressure from domestic hardliners not to give too much away — while also delivering on Rouhani’s promise to win the lifting of sanctions.

The so-called P5+1 group — the United States, Britain, China, France and Russia plus Germany — hope that the deal will make it virtually impossible for Iran to make nuclear weapons.

Iran, one of the world’s major oil producing countries, has always denied seeking the atomic bomb saying its activities are for energy generation and research.

France, which has taken a hawkish line during the negotiations, warned that sanctions could be reimposed if Tehran does not fully keep its side of the bargain.