World on edge as Trump determines fate of Iran nuclear deal

President Donald Trump determines the fate of the landmark Iran nuclear deal on Tuesday, announcing his verdict on US sanctions relief underpinning the international accord, which he has repeatedly and harshly criticised.

Officials and diplomats expect the pugnacious US leader to ignore last-ditch European pleas and move to withdraw the United States from a 2015 agreement, which he insists was "very badly negotiated".

Trump has unsuccessfully demanded changes to the Obama-era deal, which saw Iran mothball a suspected nuclear weapons programme in return for massive sanctions relief.

Months of intensive talks between the United States and European allies now appear deadlocked, with Berlin, London and Paris refusing to rewrite the agreement.

The president tweeted he would announce his decision at 2pm (6pm GMT), even as UK Foreign Secretary Boris Johnson shuttled around Washington trying to reach a last-gasp breakthrough.

One European diplomat echoed the mood around foreign embassies in Washington, saying "there is plainly a difference of opinion", acknowledging that Trump seems poised to walk away from the accord.

Concretely, the US president will decide whether to continue to waive sanctions on Iran's central bank and its oil sector dealings, a key pillar of the agreement.

"I would like to pretend to you today that I feel that there is a chance of the existing (deal) remaining intact," the European official said. "I think that that chance may exist but it is very small."

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A French official said President Emmanuel Macron left the United States last week after a similar diplomatic offensive "convinced that we would get a negative decision."

Trump's decision to scrap sanctions relief would have global ramifications, straining Iran's already crisis-racked economy, heightening tensions in the Middle East and laying bare the biggest transatlantic rift since the Iraq War.

The Iranian rial had lost around a third of its value in six months, before authorities in April took the drastic step of pegging the exchange rate to the dollar.

Danger of 'escalation'

Trump could also decide to stop waivers for a thicket of other sanctions against Iran, effectively ending US participation in the deal and putting European companies at risk of sanction.

His decision will be closely watched across the Middle East, where a number of powers are mulling their own nuclear programme, and in Pyongyang ahead of non-proliferation talks between Trump and Kim Jong-Un.

Tehran has sent mixed signals about its potential response, hinting it could leave a fatally undermined deal and return to military scale uranium enrichment.

Iran's President Hassan Rouhani said his country would stay in the agreement even if the United States pulls out, but it is unclear whether Iran's more hardline military leaders, or Supreme Leader Ali Khamenei, hold the same view.

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Killing the Iran nuclear deal would be foreign policy malpractice

The United States does not allege that Iran is breaking the terms of the agreement, but says the accord itself does not permanently end Tehran's controversial nuclear programme, stop missile tests or end bellicose Iranian activity in the region.

Since his days as a presidential candidate, Trump has vowed to scrap the deal, but has until now stopped short, amid fierce debate inside his administration.

He has complained, in particular, that Iran gets sanctions relief up front but could return to controversial activities once restrictions "sunset" in 2025.

His administration has also been angered by Iran's support for Syrian President Bashar al-Assad, the Lebanese armed group Hizballah in Syria's civil war and Shia Houthi rebels in Yemen.

With the arrival of John Bolton as National Security Advisor and Mike Pompeo as Secretary of State, the Iran hawks now appear to be in the driver's seat.

But European powers are skeptical that Trump's administration has a backup plan to restrain Iranian ambitions once he has made good on his campaign promise to tear up the deal.

UK's Johnson, who was in Washington to lobby Secretary of State Mike Pompeo and Vice President Mike Pence, told Fox News: "Plan B does not seem to be, to me, particularly well-developed at this stage."

German Foreign Minister Heiko Maas warned the accord's collapse could spark "an escalation" in the region and stressed that Washington's European allies think the deal "makes the world a safer place."