Iran and world powers locked horns in an intense second day of nuclear talks Thursday, with Tehran saying "no progress" was made towards clinching a long-awaited breakthrough deal.

Both sides, seeking to end the standoff over Iran's nuclear programme after a decade of rising tensions, stressed however that the talks in Geneva were detailed, serious and constructive.

Speculation swirled that US Secretary of State John Kerry and other top diplomats were gearing up to fly to Switzerland to join the talks for the second time in two weeks but this was not confirmed.

Raising the pressure, US Senate Majority Leader Harry Reid said in Washington that lawmakers would move to impose new sanctions on Iran in December if there is no deal.

The United States, China, Russia, Britain, France and Germany -- the so-called P5+1 -- want Iran to freeze parts of its nuclear programme for six months in return for relief from painful sanctions.

This hoped-for "first phase" deal would ease tensions while Iran and the six powers hammer out a final accord to put an end to fears that Tehran is seeking to build an atomic bomb.

Iran's delegation chief said after meetings lasting a total of four and a half hours between Foreign Minister Mohammad Jarad Zarif and P5+1 head negotiator Catherine Ashton that "no progress" had been made in narrowing differences.

Abbas Araqchi, quoted by the Mehr news agency, did not elaborate, but a European source gave a more upbeat assessment.

"We are making progress. There fewer points in brackets (in the draft agreement)," the source said.

"But obviously the remaining issues are the hardest ones... Tomorrow (Friday) will be important."

Numerous attempts to resolve the nuclear impasse have failed over the last decade, but the election this year of relative moderate Rouhani as Iranian president has raised hopes that this time a deal can be struck.

The proposed accord includes suspending uranium enrichment to 20 percent purity -- close to weapons-grade -- as well as measures reducing uranium stockpiles and tighter UN inspections.

For Israel, which refuses to rule out military action against Iran, the proposal does not go far enough.

Prime Minister Benjamin Netanyahu wants the complete and permanent dismantling of all of Iran's nuclear facilities.

"Yesterday, Iran's supreme leader, (Ayatollah Ali) Khamenei, said 'death to America, death to Israel', he said that Jews are not human beings," Netanyahu said in Moscow.

Ashton's spokesman, declining to comment in detail, said that the talks, due to resume at 0800 GMT had so far been "useful" and "very good".

"It has been very detailed it has been very substantial," Michael Mann said.

Similar talks two weeks ago came close to succeeding, prompting Kerry and other foreign ministers to jet into Geneva ready to sign a deal.

But they failed to reach an agreement after France insisted that the proposed deal did not go far enough in securing guarantees on Iran's uranium enrichment.

French Foreign Minister Laurent Fabius said Thursday that the text being debated with the Iranians was "supported by all six" world powers.

US Senate warns of new sanctions

Western powers say that the relief from painful sanctions that Iran would get in a deal would be minor, and that the main oil and banking sanctions would stay during this period.

US President Barack Obama's administration has leaned heavily on Congress to hold fire on new sanctions legislation in order to give the negotiations a chance to succeed.

But US Senator Reid said that while he supported Obama's "diplomatic effort", shortly after the Thanksgiving recess next month he would act on a new bipartisan sanctions bill if the nuclear talks do not bear fruit.

If Rouhani, meanwhile, fails to secure quick and substantial relief from the sanctions, he risks losing the support of arch-conservatives and the supreme leader, experts say.

A sticking point is Iran's insistence that its "right" to enrich uranium is recognised by the P5+1, even though this is not explicitly set out in the nuclear Non-Proliferation Treaty.

"Enrichment is a dual-use activity, it can be used for peaceful purposes or for making weapons fuel," Mark Hibbs from the Carnegie Endowment for International Peace told AFP.

"If at this stage of the negotiations the powers acknowledge Iran has a 'right to enrich', Iran can pocket that right and from there on refuse to accept any limitations on its enrichment programme on that basis."