GENEVA  - Iran agreed to curb its nuclear programme in a breakthrough deal Sunday that world powers claimed was the biggest step in decade-long efforts to deny Tehran an atomic bomb.

Tehran boasted that the agreement, which offers Iran limited sanctions relief, recognised its right to enrich uranium, but Washington denied it made any such reference as differences remained after the arduous Geneva talks.

The six world powers involved in the marathon talks however hailed the preliminary agreement, which seemed unthinkable only a few months ago and at least temporarily warded off the prospect of military escalation.

“Today, the United States together with our close allies and partners took an important first step toward a comprehensive solution that addresses our concerns with the Islamic Republic of Iran’s nuclear programme,” US President Barack Obama said.

Under the deal between Iran and the five permanent members of the UN Security Council plus Germany announced at 3:00 am Geneva time (0200 GMT), Tehran will limit uranium enrichment - the area that raises most suspicions over Iran’s alleged nuclear weapons drive - to low levels.

It will neutralise its entire stockpile of uranium enriched to medium 20-per cent purities - close to weapons-grade - within six months, US Secretary of State John Kerry said in Geneva, where he and other foreign ministers helped nail down the deal.

Iran will also not add to its stockpile of low-enriched uranium, nor install more centrifuges or commission the Arak reactor. UN atomic inspectors will also have additional, “unprecedented” access, Kerry said.

In exchange the deal will afford the Islamic republic some $7 billion  in sanctions relief and the powers promised to impose no new embargo measures for six months if Tehran sticks by the accord.

This represents “limited, temporary, targeted, and reversible relief while maintaining the vast bulk of our sanctions, including the oil, finance, and banking sanctions architecture,” the White House said.

Hassan Rouhani, whose election as Iran’s president in June raised hopes of a thaw with the West, insisted “Iran’s right to uranium enrichment on its soil was accepted in this nuclear deal by world powers.”

But Kerry was adamant: “This first step does not say that Iran has the right of enrichment, no matter what interpretative comments are made.”

Iranian Foreign Minister Javad Zarif said the recognition was implicit, as diplomats who were at loggerheads only hours earlier tried to sell the deal to their domestic audiences.

France, the member of the so-called P5+1 group that had expressed the most reservations over Iran’s commitment in a previous round of talks, said Sunday’s deal was a “step in the right direction.”

Over the next six months, Iran and the United States, China, Russia, France, Britain and Germany are to negotiate a more comprehensive deal.

Joel Rubin, director of policy for the foundation Ploughshares Fund warned that the hardest work may still lie ahead.

“This is going to challenge all of the feelings, and conceptions and ideologies and emotions that have been pent up in the US, in the West and in Israel and elsewhere for decades. It’s going to be a very, very hard task,” he said.

The deal was reached at the third meeting of the P5+1 and Iran since Rouhani, seen as a relative moderate, replaced the more hawkish Mahmoud Ahmadinejad in August saying he was ready for “serious” negotiations “without wasting time”.

Iranians, many of whom see the nuclear programme as a source of national pride, are impatient to see a lifting of sanctions that have more than halved Iran’s vital oil exports since mid-2012 and hit the economy hard.

“The structure of the sanctions against Iran has begun to crack,” Rouhani said after the Geneva signing.

Supreme leader Ali Ayatollah Khamenei, who last week described Israel as a doomed “rabid dog”, hailed the deal as an “achievement”.

Kerry said however that the deal extends the “breakout” time needed by Iran to develop nuclear weapons and thus “will make our partners in the region safer. It will make our ally Israel safer.”

Many hardliners in the United States agree that Obama, who in September held an historic phone call with Rouhani, is being too soft on Iran by negotiating with Tehran and striking this deal.

“Unfortunately, some members of Congress believe further US-mandated sanctions would improve the United States’ negotiating position in the next round of talks,” said Daryl Kimball of the Arms Control Association.

Some analysts pointed out the risk of hardliners in Iran - elite Revolutionary Guards who see any opening to the West as dangerous - and in the US Congress, which could enact harsher sanctions - acting to scuttle the breakthrough.

Ashton and Kerry hugged each other. Kerry and Russian counterpart Sergei Lavrov shook hands. Minutes later, as Iran’s delegation posed for photos, Zarif and French Foreign Minister Laurent Fabius embraced. France had taken the hardest line on Iran in recent talks.

Kerry sought to reassure sceptics in the Congress who worry that the six-month agreement gives Iran too much leeway and that it might end up using it as a stalling tactic.

Kerry told CNN that US officials entered into the deal with their eyes ‘absolutely wide open’. “We have no illusions. We don’t do this on the basis of somebody’s statements to you. We do it on the basis on actions that can be verified,” he said.

Influential US Senator Bob Corker, speaking on “Fox News Sunday,” pledged to hold the Obama administration’s “feet to the fire” to ensure that Tehran is not given excessive leeway.

Corker, the senior Republican on the Senate Foreign Relations Committee, said that the pact allowing Iran to continue to enrich uranium must not “become the norm” for a longer-term agreement.

“I think you are going to see on Capitol Hill, again, a bipartisan effort to try to make sure that this is not a final agreement,” he said.

Senator Ben Cardin, a Democrat from Maryland, agreed: “We will not stand by (and) just let this be the final deal.” Cardin also appeared on Fox.

Speaking on the ABC programme “This Week,” Republican Saxby Chambliss, vice chairman of the Senate Select Committee on Intelligence, said Congress may allow the administration to see how the deal works over the next six months.

But he added that in the future, there could be “a strong movement in the United States Senate to move ahead to tighten sanctions” on Iran.

On CNN’s “State of the Union,” Kerry also sought to provide reassurances to Israel, which views the nuclear deal as misguided.

“Israel is threatened by what has been going on in Iran,” Kerry told CNN.

“But I believe that from this day - for the next six months - Israel is in fact safer than it was yesterday because we now have a mechanism by which we are going to expand the amount of time in which they (the Iranians) can break out (toward making a nuclear bomb). We are going to have insights to their program that we didn’t have before,” he added.