In extraordinary remarks on Wednesday, Donald Trump went from threatening Iran with a new wave of attacks to suggesting the country had basic rights to enrich uranium for civilian use, that he would not pressure Tehran to abandon its ballistic missiles programme and the US was “going to have to give back” billions of dollars in frozen Iranian assets.

Those remarks, as well as the full text of the agreement – which was hailed by the Hezbollah chief, Naim Qassem, as a “great victory” – are likely to fuel anger in Israel and among hardliners in the Republican party who had urged Trump not to make a deal with Tehran.

Iran’s president, Masoud Pezeshkian, signed the agreement on Wednesday from Tehran. The US vice-president, JD Vance, is also expected to sign the deal at a more formal ceremony in Geneva on Friday.

Iran’s chief negotiator, Mohammad Bagher Ghalibaf, said: “The agreement is a record of US failure. People will see it and judge.” 

Defending the deal, Trump said no US president had ever been as tough on Iran as him, and “there is nothing as smart as the market – and the market loves it”.

Trump said that “the alternative would be a worldwide depression”, arguing that if he had not struck a deal, “the strait [of Hormuz] would never have been opened. They don’t like floating billion-dollar ships up and down the strait when their rockets are flying overhead and there are mines all over the place.” 

Senior administration officials said the deal would help prevent Iran from obtaining a nuclear weapon, pointing to an agreement to discuss down-blending its 440kg stockpile of highly enriched uranium, which could be further enriched for use in a nuclear weapon. Trump has said he was open to the stockpile being diluted inside Iran under the supervision of the International Atomic Energy Agency.

The Trump administration had delayed the release of the full text of the memorandum of understanding, which is essentially a 60-day ceasefire agreement, in order to hold more comprehensive nuclear and permanent peace talks with Iran. The 14-point plan was dictated to journalists during a background briefing by senior administration officials as Trump spoke at the end of the G7.

The deal would provide important financial incentives to Iran, including the immediate lifting of a US naval blockade on Iranian ports and the issuance of waivers for Iranian crude oil to be shipped abroad, as well as the potential lifting of all international sanctions against Iran, the unfreezing of billions of dollars in Iranian assets, and plans to develop a 0bn reconstruction fund for Iran funded by regional partners in the Gulf.

Trump angrily rejected suggestions that the US would be contributing to the $300bn fund, instead saying payouts by Gulf states were likely to be conditional on Iran’s good behaviour.

“Anyone who wants to can invest. What do you expect me to say: no one is allowed to invest? But we’re not investing; we’re not putting up even 10 cents,” he said.

The ceasefire deal included Lebanon, a key Iranian demand, which would restrain Israel from conducting military operations in the country, according to a senior administration official. It also included a clause ensuring the “territorial integrity” of Lebanon, although an administration official when asked did not confirm that meant Israel would be forced to withdraw from the swathe of the country it has occupied as a “buffer zone” against Hezbollah.

In return, Iran would agree to restrain its foreign allies including Hezbollah in Lebanon, and “reaffirms that it shall not procure or develop nuclear weapons”.

The agreement would also allow the toll-free passage of ships for 60 days through the strait of Hormuz, but on Wednesday Ghalibaf said Iran would charge ships travelling through the waterway at the end of the period stipulated in the memorandum of understanding.

In an interview aired on state television, Ghalibaf said the “strait of Hormuz will not return to prewar conditions”, adding: “Iran has the right to sovereignty over the strait of Hormuz and of course we will receive a fee for services.” 

Suzanne Maloney, the vice-president and director of the Foreign Policy program at the Brookings Institution, said: “Realistically, the level of expertise and detail that is required to hammer out even the nuclear piece of this seems overwhelming for an administration that is flying by the seat of his pants in these negotiations.

“So much is front loaded for the Iranians … they’re going to be able to export oil without the sanctions regime, which is almost surreal at this point in time. They’re going to make an awful lot of money very quickly.” 

Trump backed a G7 leaders’ joint statement that welcomed the deal but said a follow-on agreement was necessary to rein in Iran’s ballistic missile programme, an issue not directly addressed in the memorandum of understanding.

“They have to have some, because other people have some. You got to have some,” Trump said.

“What am I going to do? Am I going to let Saudi Arabia have missiles, but they can’t have them?” he added, referring to previous discussions with advisers on Iran’s missile arsenal.

France’s president, Emmanuel Macron, called it a “very good deal”, adding that US allies in the G7 support it “because it’s an agreement that puts a stop to a situation of great instability that had terrible consequences for our economies”.

But the G7 proposal for further talks involving European leaders about Iran’s ballistic missiles and support for proxy forces is certain to be rejected by Iran. Tehran has been negotiating exclusively with the US and regards Europe as largely irrelevant.

Iran is also likely to reject France and Britain’s plan for a taskforce to escort ships through the strait, a proposal endorsed in the G7 leaders’ statement.

The G7 leaders said the agreement provided “a historic opportunity to prevent Iran from acquiring any nuclear weapon and tackling the threats related to its regional and ballistic activities. We support and are ready to contribute to its implementation.” 

Trump also sounded a conciliatory note on returning frozen assets to Iran, a stipulation of the Obama administration’s Joint Comprehensive Plan of Action that he had attacked in 2015.

“We have taken a lot of their money,” Trump told reporters. “It’s not our money, it’s their money, and we froze it at a certain point in time. I guess we’re going to have to give it back, you know, if we didn’t give it back, nobody would ever invest in the dollar again.” 

Trump claimed the price of a barrel of oil had fallen to $72 – Brent crude dipped below $80 on Tuesday – and would soon fall below the level it had been at before the war.

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