Longtime adversaries Iran and the United States are set to hold talks on Saturday in Muscat, aimed at reaching a potential nuclear deal. President Donald Trump on Monday made a shock announcement that his administration would open negotiations with Iran.

"We are giving diplomacy a genuine chance in good faith and full vigilance. America should appreciate this decision, which was made despite their hostile rhetoric," said foreign ministry spokesman Esmaeil Baqaei in a post on X.

Leading the talks will be US special envoy Steve Witkoff and Iran's Foreign Minister Abbas Araghchi.

Trump said the talks would be "direct" but Araghchi has insisted they would be "indirect".

Ahead of the planned meeting, Washington continued its "maximum pressure" policy of sanctions on Iran, most recently targeting its oil network and nuclear programme.

On Wednesday, Trump said military action against Iran was "absolutely" possible if talks failed to produce a deal.

On Thursday, Ali Shamkhani, a senior adviser to Iran's supreme leader Ayatollah Ali Khamenei, warned that such threats could prompt measures including the expulsion of UN nuclear watchdog inspectors from Iran.

Washington responded by saying such a move would be "an escalation and a miscalculation on Iran's part."

Saturday's talks come after Trump sent a letter last month to Khamenei, urging negotiations and warning of possible military action if Tehran refuses.

Tehran responded weeks later, saying it was open to indirect negotiations and dismissed the possibility of direct talks as long as the United States maintains its "maximum pressure" policy.

Baqaei said Iran will "neither prejudge nor predict" ahead of the talks.

"We intend to assess the intentions and seriousness of the other side on Saturday and adjust our next moves accordingly," said Baqaei.