UN Secretary General Kofi Annan has said he is encouraged by talks between the EU's foreign policy chief and Iran over Tehran's nuclear programme.
The recent Larijani-Solana meeting "cleared up misunderstandings"
France, Germany and the UK have urged Iran to stop nuclear confrontation which could lead to UN sanctions, and follow the diplomatic path.
However, talks set for Thursday between the EU foreign policy chief and Iran's top negotiator have been postponed.
The US has said the time has come to punish Tehran with UN sanctions.
Iran says its nuclear programme is solely for power generation, but the US and other countries have accused Tehran of using it to hide a nuclear weapons programme.
France, Germany and the UK - the "EU3" - want Tehran to accept incentives to suspend uranium enrichment which could lead to making nuclear arms.
Iran has ruled out accepting any preconditions for talks and dismissed calls to suspend uranium enrichment.
The EU's foreign policy chief, Javier Solana, and Iran's top nuclear negotiator, Ali Larijani, met at the weekend.
Mr Solana is negotiating on behalf of six major powers - Germany and the five permanent UN Security Council members.
The statement from France, Germany and the UK said that although Iran had not suspended enrichment activity by the deadline, "it is still not too late to do so. We continue to extend an open hand to Iran".
It said the EU3 welcomed the recent Larijani-Solana meetings that had helped clarify misunderstandings impeding negotiations.
Mr Solana's spokeswoman said the meeting on Thursday was meant to prepare the conditions to start negotiations.
But she later said the meeting had been postponed, without giving an explanation, and that senior EU and Iranian representatives would meet instead.
Mr Annan said there had been a slight shift made by Iran over calls for it to suspend all nuclear enrichment.
He encouraged parties to explore that avenue.
"I don't think confrontation is in anyone's interest," Mr Annan said on Wednesday.
"The best solution is a negotiated one."
On his recent visit to Tehran, Mr Annan said he had urged its leaders to be more open and allow inspections of its nuclear programme.
In Vienna, the US has told the UN nuclear watchdog that Iran was "aggressively" trying to build nuclear weapons and that the time had come for sanctions to back diplomacy.
"Given Iran's history of deception, lack of transparency, provocative behaviour and disregard for its international obligations, we must take further steps to persuade Iran to abandon its nuclear weapons ambitions," US envoy Gregory Schulte told the International Atomic Energy Agency's board of governors.
"The time has come for the Security Council to back international diplomacy with international sanctions.
He said sanctions would "not signal an end to diplomacy" aimed at getting Iran to stop enriching uranium in exchange for trade incentives.