World powers on Saturday failed to persuade Iran to take steps to ease suspicions over its nuclear programme as the defiant Islamic republic insisted on uranium enrichment.
Two-day talks in Istanbul between Iran and the so-called P5+1 group ended without progress and no new meeting was scheduled to tackle concerns that Tehran is secretly developing an atomic bomb.
"We had hoped to embark on a discussion of practical ways forward, and have made every effort to make that happen. I am disappointed to say that this has not been possible," EU foreign policy chief Catherine Ashton told reporters.
"No new talks have been planned," she said.
Ashton headed the delegation of the P5+1 group, comprised of Britain, China, France, Russia, the United States and Germany.
A senior US diplomat said diplomatic channels remained open.
"The door is open... We continue to believe that there is time and space for diplomacy," he said on condition of anonymity.
The United States and Israel have not ruled out military action against Iran to prevent it from acquiring nuclear weapons.
Iran had set the stage for wrangling as soon as the meeting began on Friday, declaring that its sensitive uranium enrichment work was not up for debate.
Speaking shortly after Ashton, its chief negotiator Saeed Jalili insisted that Iran "has the right to a combustion cycle, including the enrichment of uranium," under the nuclear Non-Proliferation Treaty.
"This right must be recognised," he said, stressing that "we are ready for talks, even tomorrow" if the six powers were to accede to the long-standing Iranian demand.
The Istanbul gathering was the second between the two sides after talks resumed last month in Geneva, breaking a 14-month hiatus in diplomatic efforts to settle the dispute.
Ashton said Iranian that "preconditions" blocked progress, but stressed the powers were committed to diplomacy.
The P5+1, she said, sought to negotiate a revised version of a nuclear fuel swap proposal and ways to improve transparency through monitoring measures by the UN atomic watchdog.
"Our proposals remain on the table and... we are ready to start talking without preconditions the moment Iran is ready," she said.
Western sources familiar with the talks said the Iranians insisted on a recognition of their right to enrich uranium and the lifting of international sanctions as a precondition for talks on a possible nuclear fuel swap.
The US diplomat commented that Iran sought to split the P5+1 group, hoping to extract concessions, but faced strong unity.
"If that was their calculation, they miscalculated because I have seen a 5+1 group more united as ever before," he said.
The powers believe the swap scheme, first discussed in 2009, could ease suspicions over Tehran's activities, but say its terms should be modified in line with Iran's growing stockpile of low-enriched uranium (LEU).
Under the original draft, Iran would have received fuel for a Tehran medical research reactor from France and Russia in return for shipping out 1,200 kilogrammes of LEU, or most of its stockpile at the time.
After a prolonged stalemate, Brazil and Turkey brokered a modified deal with Iran in May.
But the United States rejected that accord, arguing it had failed to take into account additional uranium Iran enriched in the meantime, and led the UN Security Council in imposing a fourth package of sanctions.
A viable modification of the terms would require a "great increase" in the quantity of LEU Iran should ship out, a Western official said in Istanbul.
Iran insists its nuclear programme is peaceful, but has refused to suspend uranium enrichment, the sensitive process which can be used to make nuclear fuel or, in highly extended form, the fissile core of an atomic bomb.
Its defiance has prompted four sets of UN sanctions, coupled by a series of sanctions imposed unilaterally by the United States and the EU.
US Secretary of State Hillary Clinton said that last week the sanctions had "made it much more difficult for Iran to pursue its nuclear ambitions" and forced it to "slow down its timetable."