"It remains clear that there are significant gaps between the substance of the two positions," EU foreign policy chief Catherine Ashton told reporters after what she said were "tough and frank" exchanges.

She said an expert-level meeting would take place on July 3 in Istanbul with a higher-level meeting involving herself and chief Iranian negotiator Saeed Jalili to follow at an unspecified later date.

The world powers are the so-called "P5+1" -- permanent UN Security Council members Britain, China, France, Russia and the United States, plus Germany -- with their negotiating team led by Ashton.

Ashton said the world powers reaffirmed their demands for Iran to stop enriching uranium to 20-percent purity, ship out the existing stock of such material, and shut down its heavily-fortified Fordo enrichment facility.

"The choice is Iran's," she said.

"We expect Iran to decide whether it is willing to make diplomacy work, to focus on reaching agreement on concrete confidence-building steps, and to address the concerns of the international community."

Ashton said that for the first time in their talks the Iranian side had addressed the substance of the crisis but made clear there had been no sign of a breakthrough in the Moscow meeting.

"In the last session, Dr Jalili and I spoke about the fact that nobody in that room wants talks for talks' sake."

"And the fact is that they (Iran) did begin to address the substance for the first time but there is a very long way to go."

The meeting, between a group known as the P5+1, which apparently failed to make a breakthrough is being billed as part of last chance diplomacy to achieve a negotiated outcome to the showdown over Tehran's nuclear program.

"What took place today (is that) we made a number of clear points to the Iranians our concerns with their nuclear program," said Ben Rhodes, a US deputy national security advisor.

Rhodes said negotiators brought up Iran's enrichment of up to 20 percent uranium, its stockpiles of uranium and the formerly clandestine nuclear facility in Qom.

"The Iranians came back today with a set of points in response to those concerns. The P5+1 one was unified in responding very forcefully that the onus is on the Iranians to come in line with their obligations."

"We are not concerned about this particular round of talks, we are concerned about the Iranian nuclear program," Rhodes said, adding that the unity of the international coalition against Iran was holding as sanctions bite.

"The pressure has been building on the Iranians. If they thought by coming into a negotiation they would be able to relieve pressure -- the opposite has happened."

"There was a very clear and direct exchange of views today on the core issues that are at stake."

Rhodes also confirmed there would be a new round of talks in Moscow on Tuesday, after earlier rumors suggested they would not go ahead.

During several hours of tense talks at a hotel in the Russian capital, the West probed for signs that Iran could show willingness to scale down the intensity of its sensitive uranium enrichment activities.

But the Islamic republic appeared to have stuck rigidly to its refusal to give major concessions on its right to uranium enrichment, a process that can be used to make nuclear fuel but also the core of an atomic bomb.

The P5+1 is made up of Britain, China, France, Russia and the United States, plus Germany.