Vienna, Reuters—Iran and six powers failed on Monday for a second time this year to resolve their 12-year dispute over Tehran’s nuclear ambitions, and gave themselves seven more months to overcome the deadlock that has prevented an historic deal.

Western officials said they were aiming to secure an agreement on the substance of a final accord by March but that more time would be needed to reach a consensus on the all-important technical details.

Iranian President Hassan Rouhani, who is trying to win relief from crippling international economic sanctions by patching up relations with the West, said the gap between the sides had narrowed at talks in Vienna.

“It is true that we could not reach an agreement but we can still say that big steps have been taken,” he told state TV.

US Secretary of State John Kerry gave a more somber assessment, saying “real and substantial progress had been made but adding that “some significant points of disagreement” remained.

“These talks are not going to get easier just because we extend them. They’re tough. They’ve been tough. And they’re going to stay tough,” he told reporters in Vienna.

Under an interim deal reached by the six powers and Iran a year ago in Geneva, Tehran halted higher level uranium enrichment in exchange for a limited easing of the financial and trade sanctions which have badly hurt its economy, including access to some frozen oil revenues abroad.

Monday marked the second time a self-imposed deadline for a final settlement has passed without any deal. British Foreign Secretary Philip Hammond told reporters that the target date had been extended to June 30, 2015.

Tehran dismisses Western fears that its nuclear program might have military aims, saying it is entirely peaceful. However, the six powers – the United States, France, Germany, Russia, China and Britain – want to curb the uranium enrichment further to lengthen the time Iran would need to build a bomb.

“I am certain that we will reach the final accord, if not today, then tomorrow,” said Rouhani, who discussed the nuclear issue with Russian President Vladimir Putin by phone on Monday. An unashamed pragmatist, Rouhani won election by a landslide last year on promises to work to end Iran’s international isolation.

But he made clear that Tehran was taking a tough line at the talks. “There is no question the nuclear technology and facilities of the Islamic Republic of Iran will remain active and today the negotiating sides know that pressure and sanctions against Iran were futile,” he said.

Rouhani faces heavy pressure from hard-line conservatives at home who have already blocked his drive to ease restrictions on Iranians’ individual freedom.

The US administration of President Barack Obama must also overcome strong domestic misgivings.
Three influential Republican senators said the extension should be coupled with increased sanctions and a requirement that any final agreement be sent to Congress for approval. The three—John McCain, Lindsey Graham and Kelly Ayotte—said in a statement that a “bad deal” with Iran would start a nuclear arms race in the Middle East.

But Kerry defended the decision not to abandon the talks. “We would be fools,” he said, raising his voice, “to walk away from a situation where the breakout time (for Iran to develop a nuclear weapon) has already been expanded rather than narrowed, and the world is safer because this program is in place.”

In Washington, White House spokesman Josh Earnest said imposing fresh sanctions now could be counterproductive.

Hammond said the expectation was that Iran would continue to refrain from sensitive atomic activity. There was a clear target to reach a “headline agreement” of substance within the next three months and talks would resume next month, he said.

It is unclear where next month’s talks will take place, he said, noting that during the extension period, Tehran will be able to continue to access around 700 million US dollars per month in sanctions relief.

A report by the International Atomic Energy Agency, the UN nuclear watchdog, showed that Iran had reduced its stockpile of low-enriched uranium gas and taken other action to comply with last year’s interim agreement with world powers.

But one senior Western diplomat expressed pessimism. ”It’s been 10 years that proposals and ideas have been put forward,” he said on condition of anonymity. “There’s nothing left. It’s essentially a side issue now. The Iranians are not moving. It is a political choice.”