The US and Iran are making last-minute progress at nuclear talks but will need to extend negotiations to next month, Western diplomats said Monday, after the sides failed to come to terms before a midnight deadline.

Their comments matched earlier word that negotiations had now turned two-track, with the sides still racing to reduce differences at the negotiating table but also working on how long to extend the talks.

A Western diplomat spoke of “progress made this weekend,” adding that the talks would reconvene in December, with the venue yet to be decided.

An unidentified source told the Reuters news agency that the sides had agreed to renew talks next month, possibly in Austria or Oman.

As part of the agreement to extend talks, which was still being worked out by officials as of Monday afternoon, Iran would see no additional easing of sanctions, the source said.

US Secretary of State John Kerry and Iranian Foreign Minister Mohammad Javad Zarif agreed Sunday to start discussion on continuing the talks past the target date.

But Chinese Foreign Minister Wang Yi said Monday negotiators were still having “consultations” on a final agreement that meets both US demands for strict curbs on Tehran’s nuclear program and Iran’s push for sanctions relief, also suggesting that moves toward an immediate deal had not yet been abandoned.

International negotiators are worried that Iran is using its nuclear development program as a cover for developing nuclear weapons, and they have imposed economic sanctions on Tehran. Iran denies that, saying it is only interested in producing power.

Wang arrived Monday, joining the foreign ministers of the other countries negotiating with Iran — the US, Russia, Britain, France and Germany, in a top-level diplomatic effort to push the talks forward.

The five permanent members of the UN Security Council and Germany have been locked in talks with Iran for months, seeking to turn an interim deal that expires at midnight on Monday into a lasting accord.

Such an agreement, after a 12-year standoff, is aimed at easing fears that Tehran will develop nuclear weapons under the guise of its civilian activities, an ambition it strongly denies.

It could see painful sanctions on Iran lifted, silence talk of war and represent a much-needed success for both US President Barack Obama and his Iranian counterpart Hassan Rouhani.

“What a deal would do is take a big piece of business off the table and perhaps begin a long process in which the relationship not just between Iran and us but the relationship between Iran and the world, and the region, begins to change,” Obama said in an ABC News interview Sunday.

The discussions over an extension came after Kerry met Zarif for the sixth time since Thursday but again apparently failed to break the deadlock.

British Foreign Secretary Philip Hammond said however that the parties would still make a “big push tomorrow (Monday) morning to try and get this across the line.”

Wang arrived in the Austrian capital early Monday, completing the line-up of all the six powers’ foreign ministers including Laurent Fabius of France and Germany’s Frank-Walter Steinmeier.

This included Russian Foreign Minister Sergei Lavrov, a key player in the talks. President Vladimir Putin was due to talk to Rouhani by phone later Monday, ITAR-TASS reported.

Gaps on uranium and sanctions

Diplomats on both sides say that despite some progress, the two sides remain far apart on the two crucial points of contention: uranium enrichment and sanctions relief.

Enriching uranium renders it suitable for peaceful purposes like nuclear power but also, at high purities, for the fissile core of a nuclear weapon.

Tehran wants to massively ramp up the number of enrichment centrifuges — in order, it says, to make fuel for a fleet of power reactors that it is however yet to build.

The West wants them dramatically reduced which together with more stringent UN inspections and an export of Iran’s uranium stocks would make any attempt to make the bomb all but impossible.

Iran wants painful UN and Western sanctions that have strangled its vital oil exports lifted, but the powers want to stagger any relief over a long period of time to ensure Iran complies with any deal.

Extension

In view of the difficulties, many experts have long believed that the negotiators would put more time on the clock, although how this might work is unclear.

The terms of 2013’s interim deal — under which Iran froze certain activities and got limited sanction relief — could be rolled over for a certain period of time.

Alternatively there could be a new interim deal or “political framework,” adding certain measures but leaving sanctions and enrichment until later.

An Iranian source told AFP on Sunday that the extension could be “six months or a year.”

Another extension — as happened with an earlier deadline of July 20 — however carries risks of its own, including possible fresh US sanctions that could lead Iran to walk away.

It will also fuel accusations from Israel, the Middle East’s sole if undeclared nuclear-armed state, that its arch foe Iran is merely buying time to get closer to the bomb.

Arms Control Association analyst Kelsey Davenport told AFP that any extension “will have to be very short because there are too many hardliners, particularly in Washington and Tehran, that want to sabotage this deal.”

AP contributed to this report.