Iran and six world powers closed two days of "very intense" nuclear talks Thursday with little to show except an agreement to meet again next month in Moscow after sharp disagreements over the way forward.
"We have met with our Iranian counterparts over the last two days in very intense and detailed discussions," said EU foreign policy chief Catherine Ashton, representing six world powers at the talks in Baghdad.
She added that it was "clear that we both want to make progress, and that there is some common ground. However, significant differences remain."
The parties would meet again in Moscow on June 18-19, Ashton announced.
"We remain determined to resolve this problem in the near term through negotiations, and will continue to make every effort to that end," she said.
"What we have now is some common ground and a meeting in place where we can take that further forward."
Ashton had on behalf of the P5+1 -- Britain, China, France, Russia and the United States plus Germany -- laid out a new package of proposals that appeared to alarm the Iranians.
These reportedly included Iran suspending enrichment of uranium to 20-percent purities -- for the P5+1, the most worrying part of Tehran's activity and the crunch issue, since it shortens the theoretical time needed to develop the bomb.
But the P5+1 offer went down badly with Tehran since in return it did not offer the relief from crippling sanctions sought by Iran.
Reflecting official thinking in Tehran, state media ran reports slamming the package, with the IRNA news agency calling it "outdated, not comprehensive, and unbalanced."
Ashton said in her closing news conference that Iran had "declared its readiness to address 20-percent enrichment" but she did not elaborate.
She made no direct mention of sanctions, saying: "What we set out to do is to put forward very clear ideas of what we thought could be done around the 20 percent, and very clear ideas of what we thought could be offered."
Iran's negotiator, however, insisted Tehran has the "absolute right" to uranium enrichment.
"This is a peaceful activity under the supervision of the IAEA (International Atomic Energy Agency -- the UN watchdog), and it is the inalienable right of Iran and they (the P5+1) confirmed this in the meeting," Saeed Jalili said.
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He added, however, that "it can be an issue of discussion for cooperation."
Britain warned Iran on Thursday that it would intensify sanctions unless Tehran took "urgent, concrete" steps after what Foreign Secretary William Hague called "limited progress" in Baghdad.
The P5+1 reportedly proposed a pledge not to impose any new sanctions, as well as easing Iranian access to aircraft parts and a possible suspension of an EU insurance ban on ships carrying Iranian oil.
The proposals also reportedly included a revival of previous attempts to have Iran ship abroad its stockpiles of enriched uranium in return for fuel for a reactor producing medical isotopes.
But Iran announced on Tuesday that it was loading domestically produced, 20-percent enriched uranium fuel into the reactor, and the Iranian official in Baghdad was dismissive of reviving the idea of a swap.
The Baghdad talks were always going to be tough, as to make progress the two sides would have to tackle some of the thorny issues that have divided them -- and the P5+1 themselves -- for years.
"We are the beginning of this process. We are not in the middle of it and we are certainly not at the end of it," said a senior US official, portraying the "fair amount of disagreement" as a sign that the talks were at least serious.
In Moscow, "the trick for the P5+1 is to make sure Iran understands that sanctions will go forward unless Iran cooperates, while assuring Iran that if Iran cooperates, sanctions will be lifted," said Mark Hibbs, proliferation specialist at the Carnegie Foundation for International Peace.
The cost of failure in Moscow could barely be higher.
Iran is threatened with an EU oil embargo due to take full effect from July 1 that will also bar EU firms from insuring crude tankers heading to India, South Korea and Japan.
Israel, which is widely considered to have the Middle East's sole if undeclared nuclear arsenal, sees itself as Tehran's number-one target if Iran acquires the bomb and is highly sceptical diplomacy can help it.
Like the United States, it has refused to rule out military strikes on Iran's nuclear facilities to prevent it developing a weapons capability.
Oil prices have risen higher as a result, hurting global growth just as the eurozone crisis threatens to return with a vengeance and as US President Barack Obama seeks re-election in November on the back of an improving economy.
Obama, who campaigned in 2008 for his first term promising to reach out to Tehran, is also wary of his Iran policy being branded as soft and a failure by his Republican challenger Mitt Romney.