The Canadian government was "deeply skeptical" on Sunday of Iran's agreement to temporarily freeze its nuclear program, saying Ottawa's sanctions against the regime would remain firmly in place until the new deal's words turned into actions.

Foreign Affairs Minister John Baird appeared to take a stronger stance on the newly brokered deal than the United States and other allies, saying Canada would be watching Iran closely over the coming weeks and months.

"We have made-in-Canada foreign policy," he told reporters on Sunday.

"We think past actions best predict future actions. And Iran has defied the United Nations Security Council, it has defied the International Atomic Energy Agency. Simply put Iran has not earned the right to have the benefit of the doubt."

The agreement reached in Geneva during talks between Iran, the U.S. and five other world powers commits Tehran to curb its nuclear activities in exchange for limited and gradual relief from crippling economic sanctions.

The U.S. said the deal was key to preventing Iran from becoming a nuclear threat, with President Barack Obama saying the agreement "cut off Iran's most likely paths to a bomb." Israel, however, condemned the agreement as a "historic mistake."

In Ottawa, Baird took a guarded approach.

"We're deeply skeptical of Iran and its ability to honour its obligations," he said.

Baird added that Canada believes "every diplomatic measure" should be taken to ensure that Iran never obtains a nuclear weapon.

"A nuclear Iran is not just a threat to Canada, or its allies," he said. "It would also seriously damage the integrity of decades of work for nuclear non-proliferation. It would provoke other neighbouring states to develop their own nuclear deterrent."

While Baird commended those who negotiated the deal with Iran, he emphasized that Canadian sanctions remained firmly in place.

"Effective sanctions have brought the regime to present a more moderate front and open the door to negotiations," he said. "The Iranian people deserve the freedom and prosperity that they have been denied for all too long by the regime's nuclear ambitions. Until then Canadian sanctions will remain tough and will remain in full force."

Sunday's agreement is the first stage of what is hoped to bring about a final deal ensuring that Iran does not develop a nuclear weapon.

Under the deal, Iran will curb many of its nuclear activities for six months in exchange for limited relief from economic sanctions. The six-month period will give diplomats time to negotiate a more sweeping agreement.

The deal includes freezing Iran's ability to enrich uranium at a maximum five per cent level, which is well below the threshold for weapons-grade material and is aimed at easing Western concerns that Tehran could one day seek nuclear arms. International monitors will oversee Iran's compliance.

A White House statement said "key oil, banking, and financial sanctions architecture" against Iran remains in place. And it warned that any sanctions relief will be revoked and new penalties enacted if Iran fails to meet its commitments.

U.S. Secretary of State John Kerry had joined forces with foreign ministers of the nations negotiating with Iran to push the deal through early Sunday, as the talks entered their fifth day. Kerry said the first-step deal will make Israel -- an arch enemy of Iran -- safer.

But Israeli Intelligence Minister Yuval Steinitz, who is responsible for monitoring Iran's nuclear program, said there is no reason for the world to be celebrating. He said the deal reached in Geneva is based on "Iranian deception and self-delusion."

With files from The Associated Press.