US and Iran having 'very good discussions', Trump says

US President Donald Trump said his administration had "very good discussions" with Iran during all-day negotiations on Tuesday, fuelling expectations of an imminent end to the five-month conflict.

Oil prices fell and stocks jumped in Asian trade on Wednesday after Wall Street hit record highs on hopes that a deal could soon be reached to restore traffic through the blockaded Strait of Hormuz.

"They had an all-day negotiation," Trump told Fox News' "@ Night" show. The Strait of Hormuz "is going to be open very soon," Trump added. "If they back out again, they are going to get hit really hard."

Trump has often threatened massive strikes if Tehran did not reach an agreement and then cited progress in talks that have so far failed to end hostilities.

Axios, citing two regional sources and a US official, reported the US and Iran are closing in on an interim agreement to reopen the strait with the agreement of Oman, which controls part of the waterway. The report said Washington was aiming for an announcement on Wednesday.

QATAR ALSO CITES PROGRESS IN TALKS

Qatar had earlier said mediators were making progress in efforts to end the conflict, even after Tehran denied that talks were underway.

Trump and Qatar's Emir Sheikh Tamim bin Hamad Al Thani discussed efforts to narrow differences between Washington and Tehran and improve the prospects for a lasting settlement during a phone call on Tuesday, Qatar's Emiri office said.

Yemen's Houthis have also imposed a naval blockade on Saudi Arabia in the Red Sea, further restricting oil export routes. A projectile struck an Indian-flagged vessel near Yemen, causing it to capsize and sink, but all 14 seafarers on board were rescued, Indian officials said, in an attack Yemen blamed on the Houthis.

The UN International Maritime Organisation has reported at least 17 deaths of seafarers from 64 incidents in the Strait of Hormuz since the war started on February 28.