Trump announced the agreement late on Tuesday, marking a sharp shift from his earlier warning that "a whole civilization" would be wiped out, "never to be brought back again."
The deal followed mediation efforts by Pakistan’s army chief, Field Marshal Asim Munir, and Prime Minister Shehbaz Sharif, the Reuters news agency reported.
Sharif said in a post on X that he had invited US and Iranian officials to meet in Islamabad on Friday.
The last-minute agreement is contingent on Iran halting its blockade of oil and gas shipments through the Strait of Hormuz, Trump said.
Iranian Foreign Minister Abbas Araqchi said Tehran would halt counterattacks and ensure safe passage through the waterway, provided that attacks against his country cease, according to Reuters.
The European Commission on Tuesday urged "maximum restraint" from all sides and called for full compliance with international humanitarian law.
The Strait of Hormuz carries around one-fifth of global oil supplies in peacetime, according to reports.
Shipping through the waterway was disrupted after US-Israeli strikes on Iran began on February 28.
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Source: Reuters, IAR, PAP