A senior Iranian negotiator said Tehran had made progress in talks on Friday with French, British and German diplomats seeking to persuade the Islamic republic to give up its uranium enrichment programme.
But Hossein Mousavian, head of the Iranian delegation, said it was unclear whether the remaining differences would be resolved in the afternoon session despite compromises made in an initial three hours of talks.
"We have reached a satisfactory compromise on some issues," Mousavian told reporters during a short break in the talks at the French foreign ministry.
"But there are some other issues left. We are going to have a second round of negotiations. Maybe this will take another three or four hours before we can say whether we are able to agree on a compromise or not," he said.
Iran is offering a six-month suspension of its enrichment programme, which Washington believes will be used to produce atomic weapons, diplomats close to the talks said.
But the European Union's "Big Three" powers are pushing Iran to agree to an indefinite suspension.
"We still want a termination of the enrichment programme and all related activities," a Western diplomat close to the EU-Iran talks said. "I don't expect a breakthrough (on Friday)."
"This was the compromise with the G8 - no compromises," the diplomat added, referring to a recent meeting of the Group of Eight industrial countries in Washington on Iran.
Tehran has said uranium enrichment, a process of purifying uranium for use as fuel in atomic power plants or in weapons, is a sovereign right that it will never abandon.
Sirus Naseri, one of the Iranian delegates, told Reuters in a telephone interview he was "expecting a long day" as the two sides haggled over a draft deal covering political and economic issues ranging from trade relations to terrorism.
"It will take time. They (the talks) will not be easy because we are at the point of exchanging drafts," Naseri said before the meeting. A European diplomat said it was possible the talks would spill over into Saturday.
Naseri said he hoped the two sides would at least inch closer to a deal before the November 25 meeting of the UN International Atomic Energy Agency (IAEA).
If no deal is struck before the IAEA meeting, the EU is expected to support Washington's demand for a referral to the UN Security Council and possible economic sanctions.
IAEA chief Mohamed ElBaradei has encouraged Iran to reach a deal with the Europeans and has even offered to guarantee Iran's supply of nuclear fuel if it abandons its fuel production capabilities, diplomats said.