European Union foreign policy chief Catherine Ashton says a new round of talks between the six world powers and Iran will take place next month in Moscow.
Ashton, speaking at the end of a second day of talks in Baghdad, said "significant differences" remain between the two sides.
But she said the two delegations agreed to hold a new round of nuclear talks in Moscow on June 18-19.
The powers -- Britain, China, France, Germany, Russia, and the United States, known as the P5+1 -- are calling on Iran to halt its program of enriching uranium to 20 percent, a level closer to what's needed for a nuclear weapon.
Ashton, who leads the P5+1, said it was clear both sides wanted progress and had some common ground and that Iran appeared ready to discuss the enrichment issue.
"Iran declared its readiness to address the issue of 20 percent enrichment and came with its own five-point plan," she said, "including their assertion that we recognize their right to enrichment."
Ashton's spokesman, Michael Mann, told RFE/RL's Radio Farda that the Baghdad talks marked a considerable step forward.
"We have finally -- for the first time, really -- been able to discuss with the Iranian side the real, concrete, substantive issues of their nuclear program," Mann said. "And also we've been able to address the issue of 20 percent enrichment of uranium, which is the big problem for the international community."
In a statement, British Foreign Secretary William Hague said there had been "limited progress" during the Baghdad talks and warned Iran of intensifying sanctions unless Tehran takes "urgent, concrete" steps.
Said Jalili, Iran's chief nuclear negotiator, reiterated after the talks in Baghdad that Tehran insists on having the right to enrich uranium like all signatories of the Nuclear Nonproliferation Treaty.
The world powers have reportedly offered incentives, including medical isotopes and spare parts for Iran's aging civilian airplanes.
Reports say Iran is believed to have offered increased cooperation with international nuclear inspectors in exchange for an easing of Western sanctions.
Ashton said global powers remain determined to resolve the dispute in the near term.
Parchin Site Included
The unscheduled second day of talks on May 24 came after negotiators were unable to achieve a breakthrough on May 23.
Earlier this week, Iran agreed in principle with the International Atomic Energy Agency (IAEA) to allow inspectors to visit controversial sites.
IAEA chief Yukiya Amano said the not-yet-signed accord would include the Parchin military complex southeast of Tehran, where inspectors believe Iran ran explosive tests in 2003 needed to set off a nuclear charge.
Western powers suspect Iran of seeking to acquire nuclear weapons. Iran says all of its activities are part of a peaceful nuclear energy program.
U.S. ally Israel, which has had hostile relations with Iran for years, has urged world powers not to make concessions in the Baghdad talks.
Defense Minister Ehud Barak told Israeli public radio that "without strengthening the current painful sanctions, Iran will continue towards a nuclear capability."
Israel, which views a potential Iranian nuclear bomb as a threat to the Jewish-led state's existence, says military strikes on Iran remain an option.
The talks in Baghdad are the second round since negotiations resumed in April in Istanbul following a 15-month breakdown.
In recent months, Westen powers have tightened sanctions on Iran by targeting its banking sector and oil exports, Tehran's chief source of foreign revenue. The EU has pledged cut imports of Iranian oil as of July.
Iran is also under four rounds of UN sanctions aimed at pressing Tehran to suspend uranium enrichment and answer all outstanding questions about its nuclear activities.
With reporting by AFP, Reuters, and AP