Officials from Britain, France and Germany met with an Iranian delegation in Paris on Thursday and Friday, and stressed their wish to see a halt to Iran's work on the sensitive nuclear fuel cycle.
"Each side repeated their positions, and there were no changes," said a diplomat from one of the three European states.
"We would like Iran to stop nuclear fuel cycle work, but Iran sees its suspension as just a temporary measure. Therefore, no substantial progress was made," the source told AFP.
"This is disappointing, but having said that, nobody was honestly expecting a breakthrough," the diplomat added. "The meeting was more aimed at keeping up contacts."
Iran announced Saturday it had resumed making parts for centrifuges used for enriching uranium, blaming the Europeans for being critical at the International Atomic Energy Agency (IAEA).
Although Foreign Minister Kamal Kharazi asserted that Iran was committed to a temporary suspension of enrichment, he did say "no country has the right to deprive us of nuclear technology".
Under an agreement reached last year with Britain, France and Germany, Iran had agreed to suspend sensitive uranium enrichment, allow tougher inspections and file a comprehensive declaration of its nuclear activities.
The measures were aimed at "building confidence" while the IAEA conducted a major probe of Iran's bid to generate electricity through nuclear power, seen by the United States as a cover for secret weapons development.
But since then, experts from the UN's nuclear watchdog have found omissions in Iran's reporting, inspection visits have been delayed and the regime has backed away from a pledge to suspend all enrichment-related activities.
Ideally, the Europeans would like to see Iran cease its work on the nuclear fuel cycle altogether, even if such work is permitted under the nuclear Non-Proliferation Treaty (NPT).
The concern is that once fully mastered, a country possessing such technology can easily divert it into military usage -- a loophole in the treaty.
Many diplomats believe that even if Iran may not be working on nuclear weapons now, it would like to have the option in the future. And operating a full fuel cycle in full view of the IAEA is the easiest and "most legal" way to go about this.
Iran denies it is seeking nuclear weapons, but insists on its legal right to master the fuel cycle for power generation. Being dependent on outside sources for nuclear fuel, Iran says, is not an option.
During the Paris talks, "the Iranian side insisted on pushing ahead with work such as enrichment. They are still sticking to a suspension, but say they wish to resume as soon as is possible," said another diplomat close to the discussions.
"They also refused to stop other parts of their fuel cycle work," he added.
These include building the centrifuges used for enrichment, building a heavy water reactor in Arak and work at a Uranium Conversion Facility in Isfahan.
"The Iranians were told that this is the wrong direction to be heading in, but they just responded by saying it is their right under the NPT," said the source. "Technically they are right, but the problem is that first of all they need to build trust."
The next IAEA meeting is in September, and the United States has already warned that Iran's dossier is close to being referred to the UN Security Council for possible sanctions.
Iran, which insists it has fully cooperated with the IAEA, wants its dossier to be taken off the agenda of the UN nuclear watchdog.
"The dossier is a long way from being closed," a European diplomat said. "But it is also premature to say it is going in the direction of the Security Council. A lot depends on the report from the IAEA director general."