US Secretary of State John Kerry says there has been "real and substantial progress" in coming to an international agreement on Iran's nuclear programme.
He praised the "diligent" approach of his Iranian counterpart Javad Zarif, but warned there remain "significant points of disagreement" that have to be worked through.
Mr Kerry was speaking after the latest round of negotiations in Vienna were adjourned.
He said the talks had been extended for another seven months, with a "very specific goal" of reaching a political agreement within four months.
[The talks] are tough and they've been tough and they're going to stay tough. If it were easier, if views on both sides weren't as deeply held as they are then we'd have reached a final agreement months or even years ago. But in these last days in Vienna we have made real and substantial progress and we have seen new ideas surface.
Iran and the six powers will resume talks on the country's nuclear programme next month after a second bid to resolve the issue failed today.
British Foreign Secretary Philip Hammond said "some significant progress" had been made but it had not been possible to complete a deal before today's deadline.
It has now been extended until June next year.
Mr Hammond added the expectation was Iran would continue to refrain from sensitive atomic activity during that time.
Talks between six world powers and the Iranian government over the country's nuclear programme are set to adjourn without an agreement, a source close to negotiations has told Reuters.
The talks are expected to restart next month, possibly in the Gulf state of Oman, although details about a resumption are still being worked out, the source added.
They are aimed at securing a deal under which sanctions against Iran would be gradually lifted in exchange for curbs on its nuclear programme.
Iman Ghavami, the brother of Ghoncheh Ghavami has told ITV News his sister is overjoyed and relieved to be released from jail in Iran.
He said the family were relieved that 25-year-old Ghoncheh has been released in time for her 26th birthday, as her hunger strike has been taking a serious toll on her health.
Last month Ghoncheh was found guilty of "propagating against the ruling system" and was sentenced to a year - she has so far served five months.
A few hours ago my sister was bailed out for her birthday on Monday. It is so good to be home. I finally heard her voice after 149 days. It was a very emotional moment. My mother couldn't stop crying.
But she is not free yet. Bail is not freedom.
Yesterday the judge issued the verdict of one year imprisonment and two years prohibition from leaving Iran. Ghoncheh will soon defend her innocence again in the court of appeal.
We hope she will be vindicated of all charges and be allowed to come back to the UK to continue her studies.
Ghoncheh Ghavami, 25, was found guilty last month of "propagating against the ruling system" and received the custodial sentence.
The Foreign Office (FCO) have confirmed reports that Ghoncheh Ghavami has been released from jail in Iran.
A spokesperson said: "We are aware Miss Ghoncheh Ghavami has been released on bail in Iran. We remain in regular contact with her family."
Miss Ghavami has arrested after trying to watch a volleyball match in Iran.
Ghoncheh Ghavami, the British-Iranian woman arrested after trying to watch a volleyball match in June, has been released on bail her fiance has confirmed to ITV News.
A comprehensive deal to resolve the stand-off over Iran's nuclear ambitions will be "impossible" to achieve before tomorrow's deadlines, the country has reportedly said.
"Considering the short time left until the deadline and number of issues that needed to be discussed and resolved, it is impossible to reach a final and comprehensive deal by Nov 24," the Iranian Student News Agency (ISNA) quoted an unnamed member of Iran's negotiating team in Vienna as saying.
The source was also quoted as saying that that an extension was one option that would be discussed if no deal was reached.
The United States, Britain, France, Germany, Russia and China began a final round of talks with Iran on Tuesday, with hopes of acheiving an agreement in which Tehran would curb its nuclear work in exchange for the lifting of sanctions.
Dog lovers in Iran could face up to 74 lashes under new plans drafted by the country's parliament, that would also ban keeping the pets or walking them in public, according to the Agence France Presse (AFP).
Those guilty of dog related offences could faces fines ranging from 10 million to 100 million Rials (£236 to £2364), if the bill, signed by 32 lawmakers, is passed. Others could face lashes, the agency reported.
Dogs are regarded as unclean under Islamic custom and are not common in Iran. However, some families do keep them behind closed doors and, especially in more affluent areas, walk them outside.
Britain has said it is "concerned and saddened" by the execution of an Iranian woman for killing a man she claimed was trying to sexually assault her.
Foreign Office minister Tobias Ellwood said there were "questions around due process" in the case of 26-year-old Reyhaneh Jabbari, who was hanged in a Tehran prison.
He also warned that such actions would not help Iran revive relations with the rest of the world.
Mr Ellwood said: "I am very concerned and saddened that (the death penalty) has been used in the case of Reyhaneh Jabbari where there have been questions around due process. Actions like these do not help Iran build confidence or trust with the international community."