Live coverage as Iran and the U.S. reach a deal, the Strait of Hormuz will reopen, Israel-Lebanon conflict uncertain and markets react.

The United States and Iran reached an initial agreement early Monday that would extend their shaky ceasefire and reopen the Strait of Hormuz.

Israel says its forces will remain in Lebanon and Iran says it will get half of its frozen funds before final talks with the U.S. begin.

By Parisa Hafezi, Yomna Ehab and Humeyra Pamuk DUBAI/WASHINGTON, June 15 (Reuters) - The U.S. and Iran said they had agreed terms to end their war and reopen the Strait of Hormuz, news that brought relief to markets although the pact may hinge on an end to hostilities in Lebanon and defers talks on Tehran's nuclear programme.

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The deal is a major breakthrough in the conflict that set the Middle East aflame and shook the global economy. However, it did not resolve critical issues set aside for further negotiations.

The deal was expected to open the Strait of Hormuz, lift the U.S. naval blockade on Iranian ports and pave the way for further talks. It did not address Iran’s nuclear program.

Shares have soared in Asia after a tentative deal was announced on ending the Iran war and reopening the Strait of Hormuz.

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Israel now finds itself counting the ways that Mr. Netanyahu’s grand strategy against Iran has failed. And Israelis are increasingly convinced that it will make the 2015 Iran nuclear deal look “perfect in comparison,” as the Netanyahu biographer Ben Caspit wrote in the newspaper Maariv on Monday.

Tehran threatened to pull out of talks and retaliate after the Israeli military hit what it said was a Hezbollah command center.