The United States has suspended its attacks on Iran for the third consecutive night after senior military leaders recommended that Donald Trump end the aerial assault, while talks continue diplomatically to prevent escalation into full-scale conflict.

Crude prices dropped on Monday while markets reacted to the break in hostilities.

Trump is reportedly considering both diplomatic and military choices in the conflict now nearly five months old, as Benjamin Netanyahu plans a White House visit on Tuesday. The Israeli leader has openly opposed Washington talks with Iranian officials and urged continued American strikes on Iran.

Netanyahu faces heavy domestic political demands to demonstrate gains from his military actions against Iran and Hezbollah in Lebanon ahead of elections set for October.

Tehran announced on Sunday it would halt what it described as "retaliatory" operations against US partners in the area. "These attacks went on until two nights ago, yet over the past two nights the Americans have ceased their strikes," stated army spokesperson Mohammad Akraminia. "Our approach has mainly been retaliatory, and we have also stopped our response operations."

High-ranking Trump administration officials reportedly informed the president that dwindling munitions reserves could limit any prolonged military effort in the region.

Axios indicated on Sunday that Adm Bradley Cooper, the leading US military commander in the area, informed Trump the American campaign had reached the maximum of its usefulness.

The assessment reportedly influenced Trump to pause strikes on Iran for the first time in nearly two weeks. Cooper explained to Trump that the US had largely used up its prepared target list in Iran, and absent renewed major combat there was scant reason to extend the bombing, the site reported.

Questioned on Sunday on NBC Meet the Press about whether Trump was excluding further strikes in Iran, presidential UN ambassador Mike Waltz replied: "I would not go that far at all. The president keeps every option available."

The pause in fighting, which started Friday evening, follows almost two weeks of attacks on Iran and the breakdown of a ceasefire arranged by Trump. Washington attributed strikes on US troops and partners plus the closure of the strait of Hormuz, a route for roughly 20 percent of global oil and gas, to Iran.

Senior diplomats from Iran and Oman reportedly held talks on Sunday about reopening the key waterway, and a Tehran official confirmed contacts with US negotiators to avoid renewed war. Iran has insisted on payment and oversight of vessel passage through the strait.

"Mediators are active and seeking to stop tension from rising," Iranian foreign ministry spokesperson Esmail Baghaei told reporters on Sunday.

Yet an Iranian army spokesperson showed resolve, claiming the US lacked a clear plan and was "facing strategic decision-making fatigue."

The US vice-president, JD Vance, and Dan Caine, the chair of the joint chiefs of staff, cautioned Trump about the dangers of restarting military action against Iran during an Oval Office session on Friday, according to news reports. The president then directed the military to cancel fresh strikes he had warned might "eliminate all they possess."

"We are speaking with them right now," Trump told reporters on Friday. "I believe they are becoming more serious with each passing day. We remain prepared and ready, yet we are in discussions."

At a White House Correspondents Association dinner that night he noted he did not believe Iran was prepared to reach an agreement but he remained open to listening.

Caine alerted Trump to declining munitions stocks, including Patriot missile interceptors and offensive arms such as Tomahawk cruise missiles. Vance had campaigned against US military involvement in the Middle East and has become more outspoken against the Iran conflict.

Netanyahu office stated on Sunday he would hold a security cabinet session before departing for Washington on Monday. He played a key part in pressing Trump to begin joint strikes on Iran in February and has insisted US negotiators adopt a firm stance on Iran nuclear and missile programs. US negotiators have instead focused on reopening the strait of Hormuz.

Netanyahu will head to Washington amid some of the worst violence this year in the West Bank, where his forces are conducting a broad operation following the deaths of four Palestinians and two Israelis when armed settlers entered a Palestinian village on Thursday.

The US and the UK under its new prime minister, Andy Burnham, are reviewing plans for a high-level gathering in London this week to consider a coalition for protecting vessels in the strait of Hormuz and clearing mines from the waterway. The talks will serve as an early challenge for Burnham administration. The Labour government has so far declined to permit Washington use of a British airbase for offensive actions against Iran.