US Secretary of State Colin Powell has failed to persuade European ministers to toughen their stance on Iran's nuclear programme.
US and EU views on Iran differ considerably
After what he called a "very candid discussion" with EU foreign ministers in Brussels, Mr Powell said a draft European resolution was "not adequate".
The US wants Iran declared in breach of its nuclear treaty obligations, a move that could lead to UN sanctions.
But the German foreign minister said dialogue with Iran was worth the risk.
The EU resolution has been submitted to the UN's nuclear watchdog which meets on Thursday to discuss Iran.
Germany's Joschka Fischer was one of three foreign ministers who last month persuaded Iran to accept spot checks of its nuclear facilities and to halt uranium enrichment.
By contrast, the US has no high-level diplomatic ties with Iran, a country President George Bush has described as part of an "axis of evil".
Speaking to reporters on a flight to London, where he was joining President Bush, Mr Powell described the resolution proposed by Germany, France and the UK as "not adequate".
"It did not have the trigger mechanisms in the case of further Iranian intransigence or difficulty," he said.
Earlier, he told a news conference in Brussels that Iran seemed to be "moving in the right direction". But he said the US did not believe that the Iranian Government had abandoned all efforts to produce nuclear weapons.
"We have some reservations ...about whether the resolution is strong enough to convey to the world the difficulties that we have had with Iran over the years," Mr Powell said.
But his German counterpart said he was "optimistic about the progress we have made".
"We try to explore the options and use the positive options," he told reporters in Washington on Tuesday, citing the EU's diplomatic ties with Iran.
Last week, a report by International Atomic Energy Agency (IAEA) inspectors said they had found no evidence that Iran has secretly been developing nuclear weapons.
But they did admonish the Iranian authorities for being secretive.
Iran has warned of serious consequences if the IAEA refers its nuclear programme to the UN Security Council.
Tehran has always claimed its nuclear programme is designed to meet the country's energy needs.