Iran has said talks with six world powers, who are looking to curb Tehran's nuclear programme, have been "more positive".
Iranian delegate Abolfazl Zohrevand said that in comparison to the first round of talks in Geneva last month, the negotiations in Istanbul, Turkey, were being held in a "more positive way".
Iran is meeting with five permanent UN Security Council members - the US, China, Britain, France, Russia - plus Germany.
The six powers are hoping to nudge Iran towards acknowledging the need to reduce worries that it might turn its enrichment programme to making weapons. Tehran denies such aspirations, insisting it only wants to make nuclear fuel.
Tehran is under four sets of UN Security Council sanctions for refusing to cease enrichment and other activities that could be used to make nuclear weapons.
The six powers want Iran to freeze its uranium enrichment programme, but Tehran has repeatedly said that the issue is not up for discussion.
Instead, Iranian officials are pushing an agenda that covers just about everything except its nuclear programme: global disarmament, Israel's suspected nuclear arsenal, and Tehran's concerns about US military bases in Iraq and elsewhere.
Mr Zohrevand said: "There are good signs that the two sides will make progress."
Referring to the six countries, he added: "They didn't get what they had hoped to get from pressure and sanctions. They are showing some flexibility. This is helping both sides to be optimistic."
However a diplomat familiar with the talks said that the two sides put across their positions then broke for lunch.