Russia has said there is no immediate prospect of a deal to provide Iran with fuel to launch its first nuclear power plant.
Russian Atomic Energy Minister Alexander Rumyantsev said the talks had stalled over arrangements for the return of spent fuel to Russia and that they "could last a long time".
Russia is building the $800m plant in Bushehr despite strong pressure from the United States to drop the project, as Washington accuses Tehran of secretly developing an illegal weapons programme.
Meanwhile, diplomatic sources at the United Nations nuclear agency, the IAEA, have told the BBC that Britain, Germany and France offered Iran a prospect of sharing nuclear technology if it co-operated with the agency.
A letter - which was sent in August - had urged Iran to sign up to a more intrusive inspections of its nuclear facilities.
The IAEA has been pressing Iran to disclose the full extent of its nuclear activities and has given it until October to do so.
So far, there has been no response from Iran to the European proposal.
Europe 'more united'
Diplomatic sources say the US was aware of the letter before it was issued but was concerned about the move.
"Washington did not consider it very helpful at all. They were worried it ran the risk of splitting Europe and America on this issue, and they talked to their friends and colleagues in
Europe about that and attempted to dissuade them from sending
the letter," a diplomat told Reuters news agency.
According to BBC correspondent in Vienna Bethany Bell the letter highlights a split between the Europeans and the US on whether to engage or isolate Iran over its nuclear programme.
During the Iraq crisis Britain sided with the US against France and Germany but there appears to be a more united European stance towards Iran.
Iran denies it has a secret nuclear weapons programme, saying that its nuclear activity is designed exclusively to meet the country's energy needs.
Talks between Russia and Iran reportedly broken down over Iran's demand that Russia pays for the spent fuel, which Moscow refuses to do.
"An option for us could be to increase the price of fresh fuel. Talks are going on and it is premature to talk about any financial scheme at the moment," Mr Rumyantsev said on Friday.
He also played down the confusion over the deal, which has strained relations between Moscow and Washington.
IAEA chief Muhammad ElBaradei urged Iran to co-operate
"I don't see any sensation in this. This is a normal process," he added.
Mr Rumyantsev - who was speaking after talks in Moscow with US Energy Secretary Spencer Abraham - denied any suggestion that Moscow was delaying the deal under pressure from Washington.
"This does not correspond to reality," he said.
Russian officials have repeatedly stated that they share US concerns about the proliferation of nuclear weapons, but insist that Washington's accusations against Iran lack proof.
The Bushehr nuclear power station in due to become operational in 2005.