Iran rejected the proposals put forward by the six world powers meeting in Baghdad on Thursday which were aimed at curbing Tehran's nuclear program, reported the Associated Press.
The talks ended with both sides agreeing on little besides holding more talks in Moscow next month, said Agence Frace Presse.
Iran said the world powers were creating a "difficult atmosphere" as it tried to negotiate a way to end economic sanctions leveled at its nuclear program. Western powers insisted that the Islamic Republic must stop higher-grade uranium enrichment before sanctions were alleviated, according to Reuters.
The Iranian negotiators also demanded a response to their counteroffer which was meant to ease concern about Tehran's ability to make nuclear weapons, but the AP noted that the talks did not seem in danger of collapsing.
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Both sides have a keen interest in making progress through negotiations, in order to avert the threat of a regional conflict stemming from Israel's threat to bomb Iran's nuclear facilities, said Reuters.
"There is progress, there is an atmosphere of optimism after the Western powers responded to our requests," said Taleb Mahdi, a member of Iran's delegation, according to Bloomberg.
European Union foreign policy chief Catherine Ashton said, "We have met with our Iranian counterparts over the last two days in very intense and detailed discussions," according to AFP. She added that it was "clear that we both want to make progress, and that there is some common ground. However, significant differences remain."
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According to The Washington Post, the package of proposals rejected by Iran included confidence-building measures in which Iran would have to demonstrate that its program was not meant to produce a weapon by reducing the degree of uranium enrichment from 20 percent to 5 percent.
The proposals did not offer what Iran's negotiators keenly sought: relief from sanctions or any offer to reconsider the ban on Iranian oil exports to the EU which will go into effect on July 1, said The Post.
US officials hope at this point to find enough common ground to schedule another round of talks and attempt to resolve this issue diplomatically. Iran has also tentatively agreed to let inspectors from the International Atomic Energy Agency into one of their testing sites, though no deal has yet been signed.
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