US President Donald Trump has announced there is a “framework of a future deal with respect to Greenland”.

The statement came as a surprise after days of mounting tensions, culminating with a threat to impose economic sanctions on eight close US allies which have opposed his plans to seize the semi-autonomous territory of Denmark.

So what could this deal entail and will it be acceptable to Denmark and Greenland – both of which have made it clear they will not relinquish sovereignty of the world’s largest island in the Arctic?

President Trump made the announcement on his Truth Social media platform on Wednesday, after talks at the World Economic Forum in Davos, Switzerland.

“Based upon a very productive meeting that I have had with the Secretary General of NATO, Mark Rutte, we have formed the framework of a future deal with respect to Greenland,” he said.

He did not give details, but said talks would continue to reach the deal.

Rutte, for his part, said he had not discussed the key issue of Danish sovereignty over Greenland in his meeting with Trump.

The view in Denmark is that the issue is far from over and that any agreement must still be hammered out together between Greenland, Denmark and the US.

Danish Prime Minister Mette Frederiksen said Danes could negotiate “on everything political; security, investments, economy”.

“But we cannot negotiate on our sovereignty. I have been informed that this has not been the case either,” she said in a statement on Thursday.

One of two Greenlandic lawmakers in the Danish parliament, Aaja Chenmitz, said: “Nato in no case has the right to negotiate on anything without us, Greenland. Nothing about us without us”.

The UK Foreign Secretary Yvette Cooper said she hoped this meant that there would be “the direct discussions that Denmark had asked for, for Denmark, Greenland and the United States on the way forward around Greenland, protecting Greenland’s sovereignty”.

The Danish and Greenlandic reiteration that sovereignty is non-negotiable appears to be aimed at rejecting reports in the New York Times, where anonymous officials said one idea under discussion was for Denmark to cede sovereignty over small areas of Greenland where the US would build military bases.

This arrangement would be similar to the status of two military bases in Cyprus, which are controlled by the UK.

Akrotiri and Dhekelia have been under UK sovereignty since Cyprus became independent in 1960. That treaty has been modified since, but essentially it is considered British territory.

Yvette Cooper did not confirm whether she knew what the framework agreement contained, but mentioned “some very practical discussions about Greenland’s security, whilst being very, very clear that Greenland sovereignty is not up for negotiation”.

In arguing in favour of seizing Greenland, Trump has mentioned the threat of Chinese and Russian vessels around the island, even though Denmark says there is no threat “today”.

On this point, Nato allies have tried to reassure the US that they will boost security in the Arctic and Mark Rutte told the Reuters news agency on Thursday that the framework deal would also require this contribution.

“I have no doubt we can do this quite fast. Certainly I would hope for 2026, I hope even early in 2026.”

One of the ideas the UK has been calling for is to set up an Arctic Sentry, said Yvette Cooper on Thursday, which was a “very similar to the approach that Nato has taken to the Baltic sentry” – a mission to increase the surveillance of ships in the Baltic Sea after critical undersea cables were severed.

The US has had a military presence in Greenland since after World War Two.

Under a 1951 agreement with Denmark, the US can bring as many troops as it wants to Greenland. It already has more than 100 military personnel permanently stationed at its Pituffik base in the north-western tip of the territory. So discussions to reach a deal may centre on a renegotiation of that agreement, according to US officials.

The US does have military bases in many countries – including Germany – but they do not constitute sovereign territory.

Trump has insisted a lease agreement over Greenland is not good enough.

“Countries have to have ownership and you defend ownership, you don’t defend leases. And we’ll have to defend Greenland,” he said two weeks ago.

In order to acquire the island, he has threatened to use force – until a U-turn in Davos where he dropped that threat to the relief of his Nato allies.

Nato was founded in 1949 on the principle that an attack on one ally is an attack on all. These attacks were meant to come from outside, and Denmark had made it clear a military attack would spell the end of the trans-Atlantic alliance, where the US is the major partner.

The Nato secretary-general has been criticised for the praise he has constantly showered on President Trump – at one point calling him “daddy”.

“You can always take Donald Trump at his word. That is why I really think we are very glad to have him,” Rutte said on Thursday.

The Danish prime minister said she had been in constant contact with Rutte before and after Trump’s announcement. But it is not clear what – if any – Danish input led to the latest climbdown by Trump.

Trump has sought to buy Greenland off Denmark since his first time in office – and he is not the only US president to try to do so.

Trump says the US needs Greenland to protect against possible attacks from Russia and China.

He has also said Greenland is essential for his plan to build a Golden Dome defence system, designed to protect the US against missile attacks, and that European allies could co-operate in this endeavour.

Along with Greenland’s strategic location, the US has spoken about the island’s vast – and largely untapped – reserves of rare earth minerals, many of which are crucial for technologies including mobile phones and electric vehicles.

Trump has not said the US is after Greenland’s riches, but that a US control over the island “puts everybody in a really good position, especially as it pertains to security and to minerals”.

“It’s a deal that’s forever.”