The accord sought in Geneva would be intended as a first step toward a comprehensive deal to remove the specter of another Middle East war. The U.S. and Israel say they're willing to use force to stop Iran getting nuclear bombs, which Iran denies seeking. Hassan Rouhani's election as Iran's president in June and his pledge to restore an economy squeezed by the sanctions has given new momentum to diplomacy.

Iran has signaled it's willing to make compromises, shelving a demand for immediate recognition that has the right to enrich uranium, and saying it may be ready to limit its stockpile of uranium enriched to 20 percent purity. Efforts toward an accord have run into opposition that leaders on both sides are seeking to assuage.

Some U.S. lawmakers, with support from Israel, are pushing for sanctions to be tightened, not eased. While the Senate Banking Committee is preparing to discuss legislation imposing new curbs on Iran, its chairman, Democratic Senator Tim Johnson of South Dakota, said that no timetable has been set.

Eoin Treacy's view My view – In most countries stock market risk premiums tend to focus on earnings, the business environment, management, corporate governance, monetary conditions among other concerns but few investors feel obliged to price in the potential for destruction of plant and machinery as a result of war. Stress between the Shia, Sunni, Jewish and Christian populations of the Middle East necessitates that one consider the potential for war spilling into the jurisdiction one has invested in. This has generally resulted in markets such as Israel trading at a discount.

Even though Prime Minister Netanyahu has said the deal currently under negotiation with Iran is “totally unacceptable”, the potential for an easing of tensions, reduction in state sponsored terrorism, nuclear proliferation in the region and greater Iranian energy production would be welcomed by investors.

This may be part of the reason that the Saudi Arabian and Israeli markets have returned to positions of outperformance over the last month. The Saudi Arabian Tadawul Index found support in the region of the 200-day MA from September and moved to a new five-year high yesterday. The Israeli TA-100 Index broke successfully above the 1100 area for the first time since 2011 in September and continues to rally back towards the previous highs near 1250.