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Berlin: US Secretary of State Condoleezza Rice lowered expectations on Tuesday that major powers would agree on a third UN sanctions resolution.
"The political directors have made some progress. I know there are still some gaps to close," she said ahead of a meeting of foreign ministers of major powers in Berlin.
Iran reiterated on Tuesday that any new sanctions against it would not deter the country from continuing its nuclear programme.
Meanwhile, Germany urged world powers to show unity when they meet to overcome differences over imposing new sanctions on Iran.
"I can't promise we will come out of this meeting with an agreement on how to proceed in the UN Security Council, " Foreign Minister Frank-Walter Steinmeier told ARD television.
"But I am very optimistic that we can get results and show Iran that our concerns cannot be ignored, that the international community, including Russia and China, is united," he said.
Earlier, China said that Iran's nuclear standoff with the West was at a critical stage and it hoped for an objective exchange of opinion in the talks.
China has opposed sanctions and advocated more negotiations to persuade Iran to abandon its uranium enrichment programme.
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