US Secretary of State John Kerry says “hard choices” are needed if a deal over Iran’s nuclear programme is to be made by Tuesday’s deadline.
Mr Kerry warned that the two sides were “not where we need to be on several of the most difficult issues”.
His Iranian counterpart said “still nothing is clear”, as ministers were set to continue talks in Vienna.
Six world powers and Iran extended the deadline to Tuesday, after missing an earlier self-imposed cut-off point.
Speaking to reporters in the Austrian capital on Sunday, Mr Kerry said a deal was still possible.
“If hard choices get made in the next couple of days and made quickly, we could get agreement this week,” he said.
Over the past few days, “genuine progress” had been made, he added.
But the US was prepared to walk away “if we don’t have a deal and there is absolute intransigence and unwillingness to move on the things that are important”.
Iran’s Foreign Minister Javad Zarif said that “some differences remain and we are trying and working hard”.
EU’s foreign policy chief Federica Mogherini agreed that the atmosphere at the talks was “constructive, positive”.
“We are very close,” she said.
The so-called P5+1 group – the US, UK, France, China and Russia plus Germany – wants Iran to scale back its sensitive nuclear activities to ensure that it cannot build a nuclear weapon.
Iran, which wants international sanctions that have crippled its economy lifted in exchange, has always insisted that its nuclear work is peaceful.
Sticking points are still reported to be how sanctions are lifted and the amount of nuclear capability Iran is allowed to keep.
On Friday, Mr Zarif said that Iran was ready to strike a deal and negotiators had “never been closer to a lasting outcome”.
But in a video message he also called for an end to “coercion and pressure” at the nuclear talks.
Iran’s Supreme Leader Ayatollah Ali Khamenei, who has the final say on all Iranian state matters, last week rejected some key demands of the P5+1, insisting Iran would only dismantle its nuclear infrastructure if the sanctions were lifted first.
The deadline for reaching a comprehensive agreement on Tehran’s nuclear programme has already been extended from 30 June.
Once agreed, a deal has to be reviewed by the US Congress before President Obama can agree to lift US sanctions.