Talks between the European Union's foreign affairs head Josep Borrell and Iranian President Hassan Rouhani failed to make progress, with the Iranian leader threatening to block nuclear inspections.
Mr Rouhani said inspectors from the UN’s nuclear watchdog could be blocked from Iranian facilities if the country were confronted with a “new situation”.
Mr Borrell arrived in Tehran on Monday, his first visit to the Islamic republic in his role as the EU's top diplomat, in a bid to reduce regional tensions.
Iran and the United States came to the brink of an all-out confrontation in recent weeks after the killing of Iranian general Qassem Suleimani in a US drone strike in January.
Europe has positioned itself as a potential arbiter between Tehran and Washington.
The EU's hopes of de-escalating the crisis lie in resuscitating the 2015 nuclear agreement that curbed Iran's nuclear programme in exchange for sanctions relief.
The deal, signed by world powers and Iran and known as the Joint Comprehensive Plan of Action, suffered a serious body blow in 2018 when the US withdrew from it.
Iran said it would scrap all limits on enriching uranium, after the assassination of Suleimani in Baghdad.
The flouting of the JCPOA was the latest in a series of departures from the terms of the deal, which Iran said was a response to the reimposition of US sanctions.
Iran appeared to leave the door open to a return to the JCPOA by allowing inspectors from the UN's International Energy Agency, to continue inspecting its nuclear facilities.
"I asked the Iranian authorities and I think they agree we have to continue with the survey of the International Atomic Energy Agency," Mr Borrell told reporters.
"We expect some positive steps on the nuclear side, and Iranians expect some positive steps in the economic side," he said.
Mr Borrell said those issues would be addressed in the coming weeks.
Europe has tried to show Iran that its patience is not endless. Last month Germany, France and Britain triggered the dispute mechanism in the nuclear deal.
The step is the most aggressive taken by Europe so far to enforce the agreement.
Mr Borrell, who plays a central role in managing the dispute mechanism, gave Tehran more time to deal with Europe's accusations.
"We are in agreement not to go directly to a strict time limit that would oblige to go to the UN Security Council," he said of the dispute mechanism.
On Monday, Mr Borrell met with Iran's Foreign Minister Javad Zarif, and was expected to meet other Iranian officials during his visit.