Senior Iranian and European Union officials reported progress Saturday at talks meant to find common ground over Tehran's refusal to freeze uranium enrichment and international demands that it do so or risk U.N sanctions.

In an encouraging sign, the two sides agreed to continue talks into a second day Sunday.

"We had some good and constructive talks and we have made some progress in some areas, and we shall continue ... tomorrow," said chief Iranian nuclear negotiator Ali Larijani, through an interpreter.

EU foreign policy chief Javier Solana's spokeswoman, Cristina Gallach, confirmed the talks would resume Sunday, adding: "The feedback from the table is that the talks have been constructive and positive."

The discussions have been billed as possibly the last chance for Iran to avoid sanctions for rejecting the U.N. Security Council's demand that it freeze uranium enrichment, which can be misused to make nuclear arms.

The talks at the Austrian chancellor's office were meant to see if there is common ground for negotiations between six world powers and Iran over its nuclear defiance. While the five permanent Security Council members and Germany have demanded that Iran fully freeze enrichment as a condition for the talks, Tehran has steadfastly refused to do so.

CountryWatch: Iran

With the two sides seemingly so far apart, hopes for success had been slim for the mission by Solana — who is authorized by the six powers to carry their message and listen to the Iranians, without actually negotiating.

Still, the game posts appeared to have shifted slightly.

European officials, who demanded anonymity for sharing confidential information with The Associated Press, suggested that at least some of the six nations were ready to listen if Iran committed itself to an enrichment freeze soon after the start of negotiations instead of doing so as a condition for such talks.

The officials declined to provide details. But such readiness would deal a blow to U.S.-led attempts to hold fast to the demand that Iran freeze enrichment before any talks commence — or face the prospect of Security Council sanctions.

One of the officials said Solana discussed the issue with U.S. Secretary of State Condoleezza Rice before going into the meeting but declined to offer details.

As late as Friday, U.S. Undersecretary of State Nicholas Burns said Washington expected the Security Council to start discussing a draft on sanctions as early as next week unless Tehran does a last-minute turn and agrees to freeze enrichment.

But there might be opposition to that within the council. Russia and China have resisted a quick move to sanctions even while agreeing to them as the ultimate punishment. And French Foreign Minister Philippe Douste-Blazy on Thursday appeared to suggest that the demand on freezing enrichment first and talking later was negotiable, saying: "The question is to know at what moment this suspension takes place compared to negotiations."

A European diplomat told the AP such comments appeared to be a reflection that — although Britain, France and Germany formally represent the European Union within the six-nation coalition — a sizable number of countries within the 25-member EU oppose a quick move to U.N. sanctions.

China, meanwhile, repeated its stance that patience was needed in dealing with Iran, in an indirect rejection of a fast path to U.N punishment.

At the same time, Chinese Premier Wen Jiabao urged Tehran "to make constructive steps" toward ending the standoff.

"Our purpose is that the nuclear issue of Iran will be settled peacefully," he told reporters outside a meeting with EU leaders in Helsinki, Finland.

Burns had dismissed suggestions of cracks in the six-power coalition on when Iran should commit to enrichment Friday, a day after those six countries ended confidential discussions on Iran in Berlin.

Outlining the U.S. view of the timetable on Iran, Burns said the six nations would consult further by phone on Monday and hoped to present a unified approach on sanctions to their foreign ministers by the time the U.N. General Assembly opens Tuesday.

"The American view is that following these discussions on Monday and perhaps some others early next week, we should move this to the Security Council and draft a resolution" on sanctions, he said.

Iran says it wants to develop an enrichment program to generate power. But there are growing concerns it seeks the technology to enrich uranium to weapons-grade for the core of warheads.

The six powers agreed on a package of economic and political rewards in June to be offered to Tehran, but only if it stops enrichment before the start of such negotiations, meant to achieve a long-term enrichment moratorium.

But the international alliance also warned of punishments, including U.N. sanctions, if Tehran does not halt enrichment — something Iran refused to do by an Aug. 31 deadline set by the U.N. Security Council.