Tough negotiations between Iran and world powers over Tehran's nuclear programme have ended with a plan to meet next month for another round of talks but agreement on little else.
The open channels between Iran and the six-nation bloc - the five permanent Security Council members plus Germany - are seen as the most hopeful chances of outreach between Washington and Tehran in years. They also could push back threats of military action that have shaken oil markets and brought worries of triggering a wider Middle East conflict.
European Union foreign policy chief Catherine Ashton said both sides agreed to continue the discussions on June 18 and19 in Moscow in hopes of a breakthrough on international concerns about the Islamic Republic's ability to build atomic weapons.
The announcement capped two days of negotiations in Baghdad, where at times it appeared Tehran would withdraw from the talks in frustration over the West's refusal so far to scale back tough economic sanctions.
"It is clear that we both want to make progress and that there is some common ground," Ashton, who is formally leading the talks, told reporters at the end of the talks. "However, significant differences remain. Nonetheless, we do agree on the need for further discussion to expand that common ground."
Israeli leaders have been critical of the talks, claiming it allows Iran to buy time and drive a wedge between Washington and Jerusalem. On Wednesday, Israel's defence minister Ehud Barak said even possible moves by Iran to open its nuclear facilities to greater UN inspection doesn't rule out a possible Israeli military strike.
Iran went into the Baghdad talks seeking guarantees the West will scale back on its sanctions, which have targeted Iran's critical oil exports and have effectively blackballed the country from international banking networks.
Instead, Tehran's negotiators on Thursday rejected proposals by the world powers to curb its nuclear programme without getting much in return, calling them unbalanced. Saeed Jalili, Iran's top nuclear negotiator, demanded an overhaul to the Western plan and conveyed his concerns in a private meeting with Catherine Ashton.
At the heart of the issue are two different proposals. On one side is an incentive package by the six-nation group - the US, Russia, China, Britain, France and Germany - that seeks to halt the most sensitive part of Iran's nuclear fuel production.
Iran, in turn, wants the US and Europe to ease harsh economic sanctions on its oil exports in return for pledges to give wider access to UN inspectors and other concessions.