"We've made good progress," Enrique Mora, the European Union official who chaired the talks between Russia, China, Germany, France, Britain and Iran, said in a tweet following the talks.

"An agreement is shaping up," he said, adding that there were still things that needed to be worked out.

Indirect negotiations between Washington and Tehran have been going on in the Austrian capital since early April, with the other five countries that are signatories to the deal acting as intermediaries.

"Both on the nuclear side and on the sanctions side, we are now beginning to see the contours of what the final deal could look like. This is different from last time we broke," senior diplomats from the E3 comprising France, Germany and Britain, said in a statement.

"However, success is not guaranteed. There are still some very difficult issues ahead. We do not underestimate the challenges that lay before us," they added.

Iran has also said the talks are on the right track.

The United States Wednesday was more circumspect in its assessment, with State Department deputy spokeswoman Jalina Porter stating that the last two rounds of discussions "have been helpful to crystallize the choices that need to be made by both Iran as well as the United States in order to come back into a mutual return to compliance."

The various sides are due to meet again in the Austrian capital early next week.

Meanwhile Iranian representatives are holding separate talks with the International Atomic Energy Agency in Vienna on extending a three-month deal that expires this week on the agency's inspections of Iranian nuclear facilities.

The goal is to find a way back to the accord known by its acronym JCPOA, which former US president Donald Trump walked away from and which his successor Joe Biden wants to revive.

For that to happen, the United States and Iran must agree on the lifting of the sanctions reinstated by Trump and on Tehran's commitment to follow the terms of the deal.

Once Trump walked away from the agreement, the Islamic republic started to abandon the constraints on its production of nuclear material.

Diplomats are hoping to get the US back on board before Iranian presidential elections on June 18.