DUBAI, June 11 (Reuters) - Efforts to reach a preliminary deal between Iran and the U.S. have intensified, three Iranian sources and a European official told Reuters on Thursday, despite strikes launched by both sides, as they discuss a mechanism over releasing frozen Iranian funds.

The sources said Iran and the United States were still exchanging messages over details of a memorandum of understanding amid the ongoing confrontation between Tehran and Washington.

The Iranian sources said a political understanding had been reached, but some issues remained to be discussed in detail, including a mechanism for the release of tens of billions of dollars of Iranian oil revenues frozen in foreign banks.

"Iran wants $6 billion to $12 billion of its frozen funds to be released to Tehran, while Washington wants to release funds in stages for humanitarian goods and rejects returning funds to Iran outright," said one of the Iranian sources.

For its own survival, the clerical establishment's priority is not a comprehensive settlement but a framework that can restore minimum breathing space for the establishment by unlocking its frozen assets and ending the war, the Iranian sources said.

(Writing by Parisa Hafezi;Editing by Alison Williams)