The US and Qatar are reportedly working on a plan that would hand Iran billions of dollars in frozen funds after President Donald Trump signed a peace deal with the nation.

The Wall Street Journal revealed the nature of the coalition in a report which said the aim was to give Iran access to some of its $100 billion in frozen funds being held around the world. 

People familiar with the nature of the arrangement told the outlet that the money, which is mostly from oil sales, would only be made available for humanitarian spending. 

If agreed, the money would only be allowed to buy food, medicine and other humanitarian goods. 

Cash totaling $6 billion, which is currently being held in Qatar, will be the first given back to the country after sanctions were imposed in 2023 under President Joe Biden, if it is agreed upon. 

Sources told the outlet that the move could provide a template for allowing other frozen funds to filter back to the country.

Further details on it are to be hashed out over the coming months, the outlet reported, and it is just one of many moves Washington are exploring after the peace deal was signed. 

The peace deal signed this week called for the US to make Iran's frozen assets 'fully available' to them. Other countries hoarding the funds include China, India, and Iraq.

According to the outlet, the talks to release the funds held by Qatar started in late May. 

Analysts told the Journal that the country badly needs the cash injection to repair its economy.  

Trump has said the peace agreement will stave off an 'economic catastrophe' but threatened to 'bomb the hell' out of Iran if no final deal emerged. 

On Saturday, Trump posted to his Truth Social page saying: 'Radical Left fools and Dumocrats realize how well we have done in our War against Iran, with their Country being completely defeated militarily. 

'Obuma just kept giving them $Billions in cash, and never used our then depleted military for what should have been done to reign in the World’s number one sponsor of terror, Iran. 

'They had ZERO respect for him. They thought he was, like Sleepy Joe Biden, a weak and ineffective leader, and on this they were 100% correct.

'Iran got away with ”murder” for 47 years, until I came along. Then it all changed. AMERICA IS BACK!!! President DJT.'

Part of the agreement involves Iran making arrangements to ensure that traffic starts flowing through the Strat of Hormuz 'immediately'.

On Saturday, Iran said it was closing the strait and warned all vessels not to approach the shipping lane, which provides a vital role in global trade. 

Citing a US 'breach of contract' and Israel's 'continuous and relentless violation of the ceasefire in southern Lebanon', Iran's central military command announced Saturday 'that the Strait of Hormuz will be closed to vessel traffic'. 

It warned all ships that their security would be at risk if they attempted to traverse the strait, through which some 20 per cent of the world's oil and liquefied natural gas travels each year. 

The Iranian threat came minutes after Vice-President JD Vance told journalists 'things are going well' in negotiations and he expects to travel to Switzerland soon.

'I expect that I will leave some time the next couple of days, but you know it's always a delicate coordination dance,' Vance told Fox News, two days after unexpectedly postponing a planned trip to discuss next steps on the US-Iran agreement to end the war.

The vice president said Jared Kushner and Steve Witkoff were in Switzerland, handling 'some of the technical elements' of the talks, and had reported that 'things are going well.'