"Technical talks are slated to continue on all areas of the MOU. Both sides will stand down for now and vessels can move freely," a US official said, referring to the 14-point memorandum of understanding that was agreed on June 17 under which the strait would be re-opened for traffic.
Axios, which first reported the cessation of hostilities, citing a senior US official, who said talks would resume on Tuesday in Qatar.
A return to diplomacy would follow several days of strikes and counterstrikes since an Iranian projectile hit a cargo vessel in the Strait of Hormuz on Thursday, with both the US and Iran accusing the other of breaking an interim ceasefire that was agreed to on June 17.
Iran launched missiles and drones at US military sites in Kuwait and Bahrain early on Sunday, shortly after President Donald Trump threatened to wipe out the Iranian leadership if they did not stick to the agreement to end their war.
Meanwhile, Israel said it had once again struck Iran-backed armed Hezbollah militants in Lebanon, destroying underground infrastructure used by the group in a village in southern Lebanon.
That came after another strike on Saturday, which closely followed its latest ceasefire deal with Lebanon on Friday to calm fighting that Iran says must end if the wider agreement is to stick.
The US military said earlier it had struck Iran again, hours after a tanker was hit in the Strait of Hormuz, the world's most important energy shipping route, which Tehran has largely closed for most of the conflict.
"There may come a point when we are no longer able to be reasonable, and will be forced to militarily complete the job that we very successfully started," Trump said on social media, before the Axios report.
"If that happens, the Islamic Republic of Iran will no longer exist!" he added. The 14-point interim peace accord was meant to halt the fighting, which the US and Israel started on February 28, and reopen the strait while talks proceeded on issues such as Iran's nuclear program.
In a further sign of the frailty of the agreement, Iran cancelled technical talks with the US that had been scheduled for Sunday, citing recent attacks on the country and unfulfilled conditions of the Memorandum of Understanding, a member of the Office of Preservation and Publication of the Works of Iran's Supreme Leader told state television.
"For example one of the reasons is checking if we have access to the unfrozen funds, if there is no access then this condition has not been fulfilled," Mehdi Fazaeili said.
One round of mediated talks, led by Vice President JD Vance and Iran's parliamentary speaker, Mohammad Baqer Qalibaf, was held in Switzerland a week ago and Washington waived sanctions on Tehran, but fighting has since resumed and intensified.
About an hour after Trump's post, Kuwait's army said its air defences were responding to missile and drone attacks, while Bahrain said sirens had sounded there.
Iran's Islamic Revolutionary Guard Corps said in a statement its navy and air forces had launched missile and drone operations targeting US military sites in Kuwait and Bahrain.
The Guards said US strikes had violated the ceasefire and "will result in the complete halt of all diplomatic processes", state-run Press TV said. The IRGC navy command said American bases in the region "will experience hell in the coming days".
A US official, confirming Iran had targeted US facilities, told Reuters there were no reported US casualties or major damage to US sites in the Middle East.
Hours later, alarms sounded for a second time in Bahrain, where authorities said an Iranian attack damaged a residential building in Muharraq province, with no casualties reported. Bahrain urged the UN Security Council to hold an urgent session to hold Iran accountable.
The Kuwaiti army said it had intercepted two ballistic missiles with no damage or casualties.
Qatar said one of its nationals had died after sustaining injuries from shrapnel aboard a vessel that had gone missing on Saturday. A second person was injured in the incident, which was due to "military operations in the area", the interior ministry said, without giving a location or apportioning blame.
with AP
