Donald Trump has agreed to let Iran retain its civilian nuclear program in a major concession as the two sides say they are closer than ever to reaching a peace deal, with Iran wanting it done in two parts.

A senior White House official said: 'We're not bothered at all by the idea of civilian power plants in Iran; what we're bothered by is the type of infrastructure that would allow them to jump from civilian power generation to nuclear weapons development.'

The official pointed to how the United Arab Emirates has a civilian nuclear power program that could not be turned into a bomb-making operation. 

Meanwhile, Iranian Foreign Minister Abbas Araghchi confirmed the deal is in its final stages, while laying out what they want out of Washington.

That includes Israel's withdrawal from Lebanon and Tehran's continued control over a reopened Strait of Hormuz and a 'service fee' for commercial ships.

Araghchi added that he wants a two-part pact to end the war. Part one would be a memorandum of understanding followed by a lasting peace deal build on the nuclear issue and the lifting of sanctions.  

'The nuclear issue has been left for the second round and a final agreement,' he said on state television. 

The revelation indicates that the Trump administration has given Iran the green light to hold onto its civilian nuclear power plants as long as those sites cannot be used to create a nuclear weapon. 

What safeguards would be put in place to prevent Iran from scaling up its nuclear power plants to bomb-making facilities is unclear, but any steps taken by the Islamic Republic to make a nuclear weapon would derail any potential deal. 

Trump has long stressed that any end to the war would be predicated on Iran giving up its nuclear capabilities, particularly its uranium enrichment labs that US intelligence claims can make weapons-grade fuel. 

The MOU mandates that Iran's current stockpile of nuclear material be destroyed on-site and then taken out of the country. Trump has said that only the US and China can dig up the deeply buried fissile material. 

Pakistani Prime Minister Shehbaz Sharif said on Friday that the 'final text' of a peace deal between the US and Iran 'has been reached.' 

'Peace has never been this close as it is now,' he added.  

The official also said the deal would reopen the Strait of Hormuz and end the current US blockade targeting Iranian vessels. 

The US is 80 to 85 percent certain that the deal would be signed, the official said, with reports indicating a ceremony planned for Sunday in Geneva. 

Many of the hardliners in the Iranian regime are on board with the proposed MOU, the senior White House official stated. 

The Islamic regime will be rewarded economically after the deal, the US official said.

'They do get reintegrated into the world economy, they're going to be rewarded for acting like a normal country rather than the largest state sponsor of terrorism,' the official said. 'That said, those benefits only accrue if Iran delivers.'

The call to clarify exactly what is in the MOU came after the President fumed at Iranian officials for leaking the terms, saying what they put out is not the official stance of US negotiators. 

'The terms that Iran leaked out to the Fake News have nothing to do with the terms that were agreed to, in writing,' Trump wrote on Friday morning. 'What they said, including their weak and pathetic statement on having a deal, bears no relation to the truth.' 

'Very dishonorable people to deal with. With them, there is no such thing as dealing in good faith.'

The administration has said on countless occasions over the past months that a deal was close at hand.

But this time, there may be more traction as Vice President JD Vance is expected to sign a deal in Europe as soon as this weekend. 

Four US Air Force C-17 transport planes flew to Europe on Thursday, carrying equipment for a possible VP trip to Geneva, where a signing ceremony is planned in the coming days, Axios reports. 

The MOU between the US and Iran to halt the war could be signed as soon as Sunday, a source told Reuters, the same day as Trump's birthday. 

'We just made a great settlement of the war with Iran,' Trump told reporters on Thursday.

'The documents are in pretty final shape, so we'll see. It should be done over the next few days. We'll probably have a signing, maybe in Europe, and it's a great thing.'