US President Donald Trump has celebrated his 80th birthday with an Iran peace deal and a mixed martial arts event at the White House.

Trump announced the agreement with Tehran just hours before the start of Sunday’s Ultimate Fighting Championship event, which was held amid thunderstorm warnings in Washington DC.

Immediately following the card, Trump was due to fly to a meeting of heads from the G7 group of leading democracies in Evian, France, where the settlement reached with Iran to end the four-month-long war was likely to dominate.

Ahead of the cage-fighting event to mark America’s 250th anniversary of independence, Trump and UFC chief Dana White walked together from the Oval Office to the White House balcony overlooking the giant open-sided arena, nicknamed The Claw, on the South Lawn.

The 30-metre-high rigging set up for the event has been visible from the streets surrounding the White House for some days ahead of the event.

The US Marine Corps Band played Hail to Chief as Trump and White then walked to the octagon arena.

The band also performed a Trump favourite, YMCA, while the American national anthem played as fighter jets streaked overhead, sparking a cheer from the crowd and chants of “USA, USA”.

Trump, accompanied by first lady Melania and his entire immediate family, took his seat close to the signature octagon cage, where the seven fights were to be held.

Also among the 4000 guests in the custom-built venue was British heavyweight boxing star, Tyson Fury, wearing a Donald Trump for prime minister baseball cap. Meta boss Mark Zuckerberg was spotted speaking to Trump during a break in the action.

Others with cage-side seats were FBI director Kash Patel, acting US Attorney-General Todd Blanche and Speaker of the House of Representatives Mike Johnson.

Tens of thousands more watched the Freedom 250 bouts on a big screen in a park close to the White House, with some having travelled from across the country for the spectacle.

It made for some incongruous scenes with fighters pictured warming up inside the formal surroundings of the White House.

Back at the ringside, UFC fighter Josh Hokit walked over to Trump after his victory in the heavyweight fight. He put a medallion around Trump’s neck, before walking back to the octagon to give his victory speech.

Hokit praised Trump for putting on the White House event, before adding, “Lastly, Michelle Obama is a man. Am I right, America?”

There were cheers and boos from the crowd, and a brief smile from Trump, after the false and offensive remark.

While the administration said the UFC would cover the $US60 million ($A85 million) cost, official documents show seven agencies, including the Department of Homeland Security and the Federal Aviation Administration, “allocated significant resources and manpower” to the controversial event, which was the subject of an unsuccessful legal challenge.

Two Virginians sued over the fights, arguing UFC had been unlawfully granted “unfettered access to the White House … to stage a private, for-profit sports event, with all the promotional and branding opportunities that accompany such access”.

Blanche, acting for the administration, said the case had been filed too later and the two plaintiffs couldn’t prove harm.

“It would be easy enough to simply avert their gazes for the weekend,” the Justice Department said in a filing.

“Instead, they seek to enlist the power of a federal court to impose their idiosyncratic preferences on the rest of the country and ruin an event designed to celebrate the United States of America.”

Last Friday, a judge agreed with the Justice Department.

-with AAP