The trilateral direct negotiations were taking place with host Pakistan in capital Islamabad, a senior White House official said, a departure from recent practice where both sides held talks via a mediator while seated in separate rooms.

The US delegation was being led by Vice President JD Vance, special envoy Steve Witkoff and President Donald Trump's son-in-law Jared Kushner, the official said, making it the highest level of American contact since the Islamic republic was established.

The Iranian delegation, composed of more than 70 members, was being led by parliamentary speaker Mohammad Bagher Ghalibaf, joined by Foreign Minister Abbas Araghchi.

They had earlier decided to begin talks with their US counterparts after meeting with Pakistani Prime Minister Shehbaz Sharif, according to Iranian media reports.

"Commending the commitment of both delegations to engage constructively, the Prime Minister expressed the hope that these talks would serve as a stepping stone toward durable peace in the region," Sharif's office said.

The talks came as Trump said the US had started "clearing out" the strategic Strait of Hormuz, which Iran has virtually blocked and through which one-fifth of the world's crude passes at peace time, as US media reported that two US warships had crossed it on Saturday.

The US leader called it "a favor" to other countries, but a senior Iranian military official quoted by state television denied the reports of US ships crossing the key waterway.

Iran has previously said that any agreement to end the war must include the unfreezing of sanctioned Iranian assets as well as an end to Israel's war against Hezbollah in Lebanon, which Vance has said will not be up for discussion in Islamabad.

Iranian state television's correspondent at the talks said he understood that progress had been made on these issues, giving Iran the confidence to proceed. A US official denied reports Washington had agreed to unfreeze Iran assets held in Qatar.

Despite progress, the warring parties made no attempt to hide their mutual suspicion.

"Our experience in negotiating with the Americans has always been met with failure and broken promises," Ghalibaf said, shortly after landing in Pakistan.

- 'Make or break' -

Vance said before leaving the US that if the other side was "willing to negotiate in good faith, we're certainly willing to extend the open hand".

But he said the negotiating team would not be receptive "if they're going to try to play us", he added.

Experts however said Iran's delegation showed it was serious about leaving Pakistan with a deal.

"The size, seniority, and breadth of the Iranian delegation... signal both Tehran's sincerity in these negotiations and its expectations and confidence," said Trita Parsi, executive vice president of the Quincy Institute for Responsible Statecraft.

The ceasefire is already under strain, notably from Israel's continued strikes in Lebanon, which Iran and Pakistan insist is covered under the current truce.

The Israeli military said Saturday it had struck more than 200 Hezbollah targets in Lebanon within the last 24 hours, among them rocket launchers.

On Friday, Lebanon's presidency said that a meeting would be held with Israel in Washington next week.

Prime Minister Sharif, whose country's down-to-the-wire mediation got both sides to the negotiating table this week, said the talks in Islamabad would not be easy.

"An even more difficult stage lies ahead," he said, referring to efforts to permanently end fighting that began with US-Israeli strikes on Iran on February 28, sparking Iranian retaliation against Israel and across the Gulf.

"This is that stage which, in English, is called the equivalent of 'make or break.'"

- 'No nuclear weapon' -

On the US side, Trump has demanded the opening of the Strait of Hormuz as a condition for the two-week ceasefire.

The strait, through which one-fifth of the world's crude passes, has not reopened to normal traffic, however, and Trump vowed on Friday to have it open soon "with or without" Iran's cooperation.

He added that his top priority at the Islamabad talks was to ensure the Islamic republic had "no nuclear weapon. That's 99 percent of it."

Security was tight in the Pakistani capital on Saturday, with a heavy police and paramilitary presence on the streets and road diversions around the "red zone" where government and diplomatic buildings are located.

Pakistan has formulated a team of experts to facilitate the two sides in negotiations on navigation, nuclear and other key matters, a diplomatic source familiar with the matter told AFP.

The negotiations will be closely watched by other key regional players, with Egypt and Turkey having helped with mediation, along with China, all of which Pakistan was still coordinating closely with for the talks, the source said.

In Tehran, a 30-year-old resident told AFP he was sceptical negotiations would be successful, describing most of what Trump says as "pure noise and nonsense."

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