Tehran has demanded $300bn (£235bn) from the US to end the war in Iran and open up the Strait of Hormuz.

However, it will not give up control over the strategic waterway, according to a draft agreement published by Iranian state media.

The text emerged amid expectations that JD Vance, the US vice-president, would fly to Geneva to sign a deal before next week’s G7 meeting in the French Alps.

The deal is understood to be a memorandum of understanding – effectively a promise to hold further negotiations rather than a finalised peace agreement.

On Friday, Iran’s Mehr news agency, quoting a source close to Iran’s negotiating team, published what it said was the draft text of the memorandum.

It calls on the US and its allies to pay Iran reparations for damage caused by the war and “to present reconstruction plans for Iran amounting to at least $300bn”.

It is understood that the reconstruction fund would depend on a final agreement to stop Iran’s nuclear programme – which remains a distant prospect at this time – congressional support, and Tehran being willing to open up to US investment.

That would require the lifting of US sanctions on Iran, which is only likely to happen with a tough nuclear deal, a similarly strict agreement curbing ballistic missiles and the lifting of the US terror designation of the Iranian Revolutionary Guards.

The text would end the war on all fronts, including in Lebanon, see the release of $24bn in Iran’s frozen assets and set a 60-day period for negotiations on Tehran’s nuclear programme.

It also includes the “suspension of sanctions on the sale” of Iran’s oil and petrochemical products and “the complete lifting of the US naval blockade” of Iranian ports, which has been in place since April 13.

It removes Iran’s missile programme and support for regional armed groups from the agenda entirely.

However, later on Friday Donald Trump, the US president, pushed back against Tehran’s stated version of the deal, saying Iran’s description of the proposed agreement “bears no relation to the truth”.

Traffic through the Strait of Hormuz has come under Iranian control since the outbreak of war with the US and Israel on Feb 28.

Iran, which has only allowed a trickle of ships to pass through the strait, has insisted that vessels obtain permission from its armed forces before transiting.

That stranglehold has caused rising prices worldwide, including in the US, where midterm elections are looming and are expected to bring chastening results for Mr Trump.

Sources close to the negotiations said that both parties had been brought to the table by economic pain.

While the US has been hit by rising gas and oil prices, Iran has laboured under the US naval blockade, which sources said had accomplished more than the US air strikes.

Iran’s nuclear programme has been a contentious issue for Washington, which has long insisted that Tehran should give up its enrichment capabilities and its stockpile of highly enriched uranium.

In a separate report, the official IRNA news agency said Iran would “negotiate only the nuclear programme solely within the framework of the Islamic Republic’s fundamental principles”.

It has reported that “Iran’s right to enrich uranium and the retention of enriched material... will be emphasised with a view to their inclusion in the final agreement”.

A foreign ministry spokesman said the text still required review and finalisation by the relevant Iranian bodies.

If the deal is signed in this form, Mr Trump is certain to face criticism from Democrats and Republicans.

Democrats will point out that it is potentially worse than Barack Obama’s Iran nuclear deal, which exchanged gradual sanctions relief for progress in the nuclear programme. Mr Trump pulled the US out of that deal in his first term.

Maga Republicans, already divided over Mr Trump’s foray into the foreign “forever wars” he vowed never to fight, will be enraged by the cost of the conflict or the fact that major concessions have been offered in return for nothing more than talks about talks.

Mr Trump has repeatedly said that a deal with Iran was close, only for hopes to be dashed. CNN said the president had predicted an agreement no fewer than 39 times.

On Thursday night, Benjamin Netanyahu, the Israeli prime minister and a Trump ally, said Israel was not party to the memorandum of understanding.

He said the US president had given him a commitment that a final peace deal would include the removal of enriched material, the dismantling of enrichment infrastructure, limits on missile production and the cessation of Iran’s support for its terrorist proxies in the region.

However, Iran has not made any firm commitments to those goals so far.