A landmark deal that curbs parts of Iran's disputed nuclear programme in exchange for sanctions relief will take effect from January 20, Tehran and Western powers said Sunday.

US President Barack Obama welcomed the news, but warned there was still a rough road ahead to clinch a comprehensive deal.

Western nations and Israel have long suspected Iran of pursuing a nuclear weapons capability alongside its civilian programme, charges the Islamic republic fiercely denies.

Tehran agreed in November to roll back parts of its nuclear work and halt further advances in exchange for the release of billions of dollars in frozen assets and limited relief from sanctions that have choked its economy.

The deal was a major achievement for President Hassan Rouhani, who won a first-round electoral victory over a pool of conservatives last year by vowing a more diplomatic approach with the West after eight years of stalled talks and escalating sanctions under his hardline predecessor, Mahmoud Ahmadinejad.

"Both sides reached the same interpretation on how to implement the agreement and the first step will be executed from January 20," Iran's chief nuclear negotiator Abbas Araqchi said, quoted by IRNA news agency.

The White House confirmed the news.

"Beginning January 20th, Iran will for the first time start eliminating its stockpile of higher levels of enriched uranium and dismantling some of the infrastructure that makes such enrichment possible," it said.

$4.2 billion unblocked

A senior US administration official told AFP that the first $550-million installment of $4.2 billion in frozen assets would be released early next month.

"The installment schedule starts on Feb. 1 and the payments are evenly distributed" across 180 days, a senior US administration official told AFP.

February 1 is a Saturday and the first payment might not be made until the following Monday.

Similar amounts will be unblocked roughly every month for six months, with the last payment due around July 20.

Araqchi said Tehran would keep to its part of the bargain, with half of its 20 percent enriched uranium diluted or oxidised.

A US official warned the sanctions relief would be terminated if Tehran did not comply.

Obama said the move by both sides was an "important step forward" and stressed the focus was now "on the critical work of pursuing a comprehensive resolution that addresses our concerns over Iran's nuclear programme".

"I have no illusions about how hard it will be to achieve this objective, but for the sake of our national security and the peace and security of the world, now is the time to give diplomacy a chance to succeed," said Obama.

The US president said he would veto any attempt by Congress to impose new sanctions on Iran during the next phase of negotiations.

British Foreign Secretary William Hague and US Secretary of State John Kerry also welcomed the setting of the implementation date.

"The entry into force of this agreement on 20 January is an important step towards peacefully resolving the Iranian nuclear issue, on which comprehensive negotiations will now start," said Hague.

Kerry said the development was a "critical, significant step forward".

After two days of exhaustive talks, Iran and the European Union -- which represents the P5+1 of Britain, China, France, Russia and the United States plus Germany -- agreed Friday on how to implement the deal.

EU foreign policy chief Catherine Ashton said the agreement lays "the foundations for a coherent, robust and smooth implementation" of the November deal for the next six months.

New generation nuclear centrifuges

Iran and world powers have held several sessions of talks in Vienna and Geneva to fine-tune the deal in the past weeks, and the date of January 20 was reached at the last round in the Swiss city.

Diplomats said there were three main hurdles at the last session of negotiations, namely over a new generation of Iranian nuclear centrifuges which could potentially enable Tehran to purify uranium to a weapons-grade level.

In August, Iran said it has about 19,000 centrifuges, including 1,000 of new P-2 generation, confirming figures from the UN watchdog overseeing its nuclear drive.

Analysts also welcomed the implementation date but said problems could still arise to block further negotiations.

"There of course are going to be hurdles along the way, disagreements between Iran and the P5+1, actions by the US Congress, opposition to the Rouhani government approach by Iranian hardliners, so this is just really the first step, but it's a positive first step," said Alireza Nader of the Rand Corporation.

Under the November deal, Iran agreed it will not enrich uranium over five percent for six months while neutralising its stockpile of uranium enriched to 20 percent.

It also agreed to allow daily site inspections of its Fordo and Natanz enrichment facilities by experts from the UN nuclear watchdog IAEA, as well as hand over information about the design of the Arak reactor.

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