Nuclear negotiators have failed to meet a Monday deadline for a deal that would ease international concerns about Iran's atomic programme and are poised to extend the negotiations for a comprehensive agreement until July 2015, diplomats said.
Iran and six powers - the US, China, Russia, Britain, France plus Germany (P5 1) - have been negotiating for six days to turn an interim accord reached with the Islamic Republic a year ago into a lasting agreement.
The six nations want Tehran to scale back its nuclear programme in exchange for a lifting of sanctions.
Quoting a Western diplomat close to the talks, the Reuters news agency had earlier reported that negotiators were hoping that a deal on "political pieces" could be reached by March.
Some progress has been made but we need to discuss some issues with our capitals. We will meet again before the new year.
"Some progress has been made," said the diplomat involved in the talks. "But we need to discuss some issues with our capitals. We will meet again before the new year. This is an ongoing process."
"It's important that they're continuing negotiations to reach an agreement, but there is big disappointment at missing the deadline, and the environment will be more doubtful, unforgiving in both Washington and Tehran," Trita Parsi, president of the National Iranian American Council told Al Jazeera from Vienna.
US Secretary of State John Kerry had earlier said in Vienna that "serious gaps" remained between them and Iranians.
He met with Iranian Foreign Minister Mohammad Javad Zarif several times over the past few days in Geneva.
After 12 years of rising tensions, negotiators sought to reach a deal by Monday midnight aimed at easing fears that Tehran will develop nuclear weapons under the guise of developing energy for civilian use - an ambition Iran denies.
Iranian officials have refused to reduce the volume of uranium they are capable of enriching, a stand western officials say is unacceptable as this would potentially allow the country to amass enough fissile material for an atomic bomb in little time.
A second sticking point is the pace and sequencing of sanctions relief. Iran wants them terminated swiftly, not suspended and gradually scrapped, depending on the degree of Iranian compliance with the deal terms, as the West wants.
Another dispute is over the deal's duration: Western countries want it to be up to 20 years but Iran wants it much shorter.
Benjamin Netanyahu, Israel's prime minister, welcomed a lack of progress at the Vienna talks.
"No deal is better than a bad deal. The deal that Iran was pushing for was terrible. A deal would have left Iran with the
ability to enrich uranium for an atom bomb while removing the sanctions," Netanyahu said.
"The right deal that is needed is to dismantle Iran's capacity to make atomic bombs and only then dismantle the sanctions.
"Since that's not in the offing, this result is better, a lot better," he said, in response to news the Vienna
talks were likely to break off and resume next year.
Source: Al Jazeera and agencies