On Wednesday at the meeting in Baghdad the P5+1 powers -- Britain, China, France, Russia and the United States plus Germany -- put a new package of proposals on the table that appeared to horrify the Iranians.
An official with the Iranian delegation who wished to remain anonymous called for the P5+1 to "revise" the offer, even saying that common ground was "not yet sufficient for another round" of talks after Baghdad.
Reflecting official thinking, Iranian state media, including the Islamic Republic News Agency, all called the proposals "outdated, not comprehensive and unbalanced".
The new approach, presented on behalf of the P5+1 by EU foreign policy chief Catherine Ashton, was thought to include the demand that Iran suspend uranium enrichment to 20 percent.
In return they were prepared to offer various sweeteners but not Iran's key demand of relaxing some of the UN Security Council and unilateral sanctions piled on the Islamic republic in recent years.
Instead they reportedly proposed a pledge not to impose any new sanctions, as well easing Iranian access to aircraft parts and a possible suspension of an EU insurance ban on ships carrying Iranian oil.
It also reportedly included a revival of previous attempts to get Iran to 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.
"A possible swap of uranium enriched by Iran for fuel isn't very interesting for us because we are already producing our own fuel," the Iranian official said.
Iran made a five-step counter-proposal that an official said was "based on the principles of step-by-step and reciprocity", which the ISNA news agency called "comprehensive... transparent and practical".
Iran and the major powers returned to talks in Istanbul in mid-April after a 15-month hiatus, finding enough common ground to agree to meet again in Baghdad, hailing what they said was a fresh attitude.
But 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.
"There have been some areas of common ground and there has been a fair amount of disagreement," said a senior US official involved in the Baghdad talks. "But we all knew that we were going to have a lot of gaps and areas of disagreement."
Diplomats and analysts said that a satisfactory outcome would be an agreement to hold more regular talks at working level to thrash out a series of confidence-building measures in what would be a lengthy process.
One key way for Iran to win the confidence of the P5+1 would be to implement the additional protocol of the nuclear Non-Proliferation Treaty, which allows for more intrusive inspections by the International Atomic Energy Agency.
The IAEA also wants Iran to address allegations made in its November report that until 2003, and possibly since, Tehran had a "structured programme" of "activities relevant to the development of a nuclear explosive device".
IAEA chief Yukiya Amano said on Tuesday after talks in Tehran that a deal on ways to go over these accusations with the Iranians would be signed "quite soon". Western reaction though was cool.
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The unscheduled 2nd day of the meeting in Baghdad seems to have exposed the differences between the world powers on proposals and NOT between them and Iran!
In this nuclear dispute between Iran and the West, trust is the litmus test. Despite Iran's relentless assurance, its nuclear program were for peaceful purposes, the West doesn't seem to trust Tehran. While both sides try to agree on the amount of uranium Iran should be allowed to enrich, the U.S. and Israel insist on zero enrichment, which Tehran no doubt doesn't accept.