An agreement for Iran to curb its nuclear ambitions in exchange for the easing of sanctions has sparked a diplomatic row, with the the Israeli Prime Minister, Binyamin Netanyahu, calling the deal a "historic mistake".

The deal reached between Iran and six world powers in Geneva on Sunday is an interim agreement that many hope is a first step towards resolving a dangerous decade-old standoff.

While it was welcomed in many world capitals, the Israeli Prime Minister, Binyamin Netanyahu, said: "What was concluded in Geneva last night is not a historic agreement, it is a historic mistake."

Following the outburst, US President Barack Obama called Netanyahu to reaffirm the US's commitment to the deal, and to preventing Iran from obtaining a nuclear weapon.

Key terms of the deal What Iran must do Halt enrichment above five per cent. Dismantle technical connections required to enrich above five per cent. Not install additional centrifuges of any type. Not install or use any next-generation centrifuges to enrich uranium. Not construct additional enrichment facilities. Not commission or fuel Arak reactor. Provide daily access to IAEA inspectors at Natanz and Fordow sites. Provide IAEA access to centrifuge assembly, production and storage facilities. Provide design information for Arak reactor. What world powers offer in return Not impose new nuclear-related sanctions for six months Suspend some sanctions on gold and precious metals, cars and petrochemical exports, potentially providing Iran approximately $1.5 billion. Allow purchases of Iranian oil at their current levels. License safety-related repairs and inspections inside Iran for certain Iranian airlines. Allow $400m in governmental tuition assistance to be transferred from restricted funds directly to educational institutions in third countries to defray the tuition costs of Iranian students.

Netanyahu had said that the deal usurped a sanctions regime that took years to build, and left little incentive for Iran to dismantle its nuclear capabilities.

"Today the world has become a more dangerous place because the most dangerous regime in the world took a significant step towards obtaining the world's most dangerous weapon.

He warned that Israel still had all options on the table.

"Israel has many friends and allies, but when they're mistaken, it is my duty to speak out... the regime in Iran is committed to destroying Israel. And Israel has the right and the obligation to defend itself by itself from any threat."

John Kerry, the US secretary of state, disagreed with Netanyahu's appraisal, saying that Israel had been made safer by the deal.

"I believe that from this day, for the next six months, Israel is in fact safer than it was yesterday because we now have a mechanism by which we are going to expand the amount of time in which they [Tehran] can break out [toward making a nuclear bomb]. We are going to have insights to their programme that we did not have before," he added.

"I believe that Israel in fact will be safer, providing we make sure that these... sanctions do not get lifted in a way that reduces the pressure on Iran - and we do not believe they will be, there's very little sanctions relief here - that the basic architecture of the sanctions stays in place," Kerry said.

According to the deal, Tehran will halt progress on enrichment capacity, stop work on the heavy water reactor in Arak and open sites for inspection.

In return, world powers will remove a limited number of economic sanctions.

Following the deal, the US President Barack Obama said that it was an "important first step" towards addressing the world's concerns over the Iran's disputed nuclear programme.

He added that the deal included "substantial limitations'' on Iran and cut off the Iran's most likely path to a bomb.

Mohammad Javad Zarif, the Iranian foreign minister, said that he hoped the sides could start restoring the lost confidence.

"The Iranian people demand respect for their rights and dignity, it is important to restore their confidence and I hope this process can do that," he added.

Catherine Ashton, the European Union foreign policy chief, said, she was confident of a long term deal.

"This is the first step as you will see its very much within the framework of reaching a comprehensive agreement," she said.

Diplomacy stepped up

The Western powers' goal had been to cap Iran's nuclear energy programme, which has a history of evading UN inspections and investigations, and to remove any risk of Tehran covertly enriching uranium to a level suitable for bombs.

Diplomacy was stepped up after the landslide election of the relative moderate Hassan Rouhani as Iranian president in June, replacing the bellicose nationalist, Mahmoud Ahmadinejad.

Rouhani aims to mend fences with big powers and get sanctions lifted. He obtained crucial public backing from Supreme Leader Ayatollah Ali Khamenei, keeping powerful hardline critics at bay.

Hero's welcome

Hundreds of cheering supporters gathered at Tehran's airport on Sunday to welcome back Iran's nuclear negotiators. The crowd, mostly young students, called both Iran's foreign minister and its top nuclear negotiator "ambassadors of peace''.

They carried flowers and Iranian flags and chanted: "No to war, sanctions, surrender and insult."