The US and Iran agreed to a two-week conditional ceasefire on Tuesday evening, which included a temporary reopening of the strait of Hormuz, after a last-minute diplomatic intervention led by Pakistan, canceling an ultimatum from Donald Trump for Iran to surrender or face widespread destruction.

Trump’s announcement of the ceasefire agreement came less than two hours before the US president’s self-imposed 8pm Eastern time deadline to bomb Iran’s power plants and bridges in a move that legal scholars, as well as officials from numerous countries and the pope, had warned could constitute war crimes.

Just hours earlier, Trump had written on Truth Social: “A whole civilization will die tonight, never to be brought back again. I don’t want that to happen, but it probably will.” American B-52 bombers were reported to be en route to Iran before the ceasefire agreement was announced.

But by Tuesday evening, Trump announced that a ceasefire agreement had been mediated through Pakistan, whose prime minister, Shehbaz Sharif, had requested the two-week peace in order to “allow diplomacy to run its course”.

Trump wrote in a post that “subject to the Islamic Republic of Iran agreeing to the COMPLETE, IMMEDIATE, and SAFE OPENING of the Strait of Hormuz, I agree to suspend the bombing and attack of Iran for a period of two weeks”.

In a separate post later, the US president called Tuesday “a big day for world peace” on a social media post, claiming that Iran had “had enough”. He said the US would be “helping with the traffic buildup” in the strait of Hormuz and that “big money will be made” as Iran begins reconstruction.

For several hours afterwards, Israel’s position or agreement with the deal was unclear. But just before midnight ET, the prime minister, Benjamin Netanyahu, said Israel backed the US ceasefire with Iran but that the deal did not cover fighting against Hezbollah in Lebanon. His office said Israel also supported US efforts to ensure Iran no longer posed a nuclear or missile threat.

The ceasefire process was clouded in uncertainty after Iran released two different versions of the 10-point plan intended to be the basis for negotiations, and which Trump said was a “workable basis on which to negotiate”.

In the version released in Farsi, Iran included the phrase “acceptance of enrichment” for its nuclear program. But for reasons that remain unclear, that phrase was missing in English versions shared by Iranian diplomats to journalists.

Pakistan has invited the US and Iran to talks in Islamabad on Friday. Tehran said it would attend, but Washington has yet to publicly accept the invitation.

In a telephone call with Agence France-Presse, Trump said he believed China had persuaded Iran to negotiate, and said Tehran’s enriched uranium would be “perfectly taken care of”, without providing more detail.

In the two-week ceasefire, Trump said, he believed the US and Iran could negotiate over the 10-point proposal that would allow an armistice to be “finalized and consummated”.

“This will be a double sided CEASEFIRE!” he continued. “The reason for doing so is that we have already met and exceeded all Military objectives, and are very far along with a definitive Agreement concerning Longterm PEACE with Iran, and PEACE in the Middle East.”

Iran’s foreign minister, Abbas Araghchi, issued a statement shortly after Trump’s announcement saying Iran had agreed to the ceasefire. “For a period of two weeks, safe passage through the Strait of Hormuz will be possible via coordinating with Iran’s Armed Forces,” he wrote.

Oil prices dived, stocks surged and the dollar was knocked back on Wednesday as a two-week Middle East ceasefire sparked a relief rally, fuelled by hopes that oil and gas flows through the strait of Hormuz could resume.

Despite the provisional ceasefire, attacks continued across the region in the hours after Trump’s announcement. Before the deadline, airstrikes hit two bridges and a train station in Iran, and the US hit military infrastructure on Kharg Island, a key hub for Iranian oil production.

The sudden about-face will allow Trump to step back as the US war in Iran has dragged on for five weeks with little sign that Tehran is ready to surrender or release its hold on the strait, a conduit for a fifth of the global energy supply, where traffic has slowed to a trickle.

Trump had earlier rejected the 10-point plan as “not good enough” but the president has set deadlines before and allowed them to pass over the five weeks of the conflict. Yet he insisted on Tuesday the ensuing hours would be “one of the most important moments in the long and complex history of the World” unless “something revolutionarily wonderful” happened, with “less radicalized minds” in Iran’s leadership.

News of the provisional ceasefire deal was greeted with caution elsewhere. In Australia, the government warned that the latest developments would not necessarily mean the fuel crisis is over.

Oil prices fell as traders bet that the reopening of the strait of Hormuz would help fuel supply resume, but the energy minister, Chris Bowen, told reporters Australians should “not get ahead of ourselves”.

He said: “People shouldn’t take today’s progress and expect prices to fall. We welcome progress, but I don’t think we can say the [strait of Hormuz is] now open.”