Senior US senator and Democrat Harry Reid says the senate will move to impose new sanctions on Iran as early as December if nuclear negotiations in Geneva don't succeed.
The Senate majority leader says he would support a bill to broaden the scope of existing current petroleum sanctions and limit trade with strategic sectors of the Iranian economy.
A sanctions bill has been held up in the Senate banking committee, but President Barack Obama has urged a delay in broadening sanctions.
Six world powers including the US, are seeking an interim deal under which Tehran would curb uranium enrichment, in return for the lifting of some international sanctions, the BBC reports.
Iran spoke of "serious issues" that must be resolved, while one Western diplomat cited "considerable gaps".
A key Iranian negotiator said he did not think a deal would be concluded on Thursday, and it is unclear if foreign ministers will join the talks.
The deal could see Iran curb uranium enrichment for some sanctions relief.
Iran insists its nuclear programme is for peaceful purposes, but some world powers suspect it is seeking a nuclear weapons capability.
Following an afternoon session, Iranian Deputy Foreign Minister Abbas Araqchi was quoted by the Mehr news agency as saying that "serious issues remain a source of difference".
All seven parties of the P5+1 and Iran held talks on Thursday afternoon and more bilateral meetings took place after that. The sides failed to agree a deal at a previous round of talks earlier in November.
The US has said an interim agreement would see the bulk of international and US sanctions targeting the Islamic Republic's nuclear programme remain in place.
