In a joint statement, EU foreign policy chief Catherine Ashton and Iranian Foreign Minister Mohammad Javad Zarif said that although diplomatic efforts had not yielded a finalised solution, they saw a "credible path through which a comprehensive solution can be reached."
They also said that there is "strong commitment" from all sides to find an appropriate, comprehensive solution to the political impasse.
The statement comes after several months of negotiations between the five permanent Security Council members, Germany, and Iran – known as the Joint Plan of Action – failed to reach a long-lasting agreement about Iran's nuclear programme.
The latest round of negotiations took place in Vienna, Austria, where US Secretary of State John Kerry and other foreign ministers met to turn a previously forged interim agreement into a permanent deal.
According to AFP, these negotiations are the best chance at resolving the 12-year deadlock over Iran's uranium enrichment programme, which it insists is entirely for peaceful purposes. While Iran denies ambitions to become the second nuclear-armed country in the Middle East, the West remains suspicious of Tehran's true intentions.
On the other side, Iran is seeking the lifting of UN and Western sanctions that have crippled its economy, although the powers are not likely to comply with this request until Iran dramatically reduces its nuclear activity and allows for thorough UN inspections.
Kerry said that the Vienna talks allowed the sides to make "substantial progress" and Iranian President Hassan Rouhani said that "most of the gaps have been removed."
However, AFP reported diplomats on both sides saying that, while the talks did allow for some progress, the issues of uranium enrichment and sanctions remain points of contention.
A final agreement could see painful sanctions on Iran lifted, silence talk of war and represent a groundbreaking political achievement for Rouhani and a foreign policy success for his US counterpart Barack Obama.
The leaders of the Joint Plan of Action agreed to meet again "to build on the current momentum" in December and continue further negotiations until 30 June 2015 under the monitoring of the IAEA.