British Foreign Secretary William Hague said there would be pressure to intensify sanctions on Iran if it could not reach a deal with world powers over its disputed nuclear programme.
But if Tehran could strike a preliminary agreement, world powers would lift some of the sanctions they have imposed on it offering it "limited, proportionate sanctions relief," he added.
Mr Hague was speaking after the latest round of talks ended without agreement.
"An interim agreement would involve offering Iran limited, proportionate sanctions relief," Mr Hague told the Commons.
He reiterated that a "deal is on the table ... and can be reached".
Britain wanted an interim agreement with Iran as a first step towards a full deal on Tehran's disputed nuclear programme, he added.
Despite reports to the contrary, he said world powers had a united stance in talks with Iran at the weekend and that no one country had vetoed a deal.
Meanwhile, Iran will grant UN inspectors "managed access" to a uranium mine and a heavy water plant within three months as part of a cooperation pact.
It was signed by UN nuclear agency chief Yukiya Amano in Tehran after Iran and six world powers came close to a preliminary nuclear agreement during broader talks in Geneva at the weekend.
Another meeting has been scheduled for 20 November.
The sets of negotiations are separate but both centre on fears that Iran may be seeking the capability to build nuclear weapons, a charge it denies.
Cooperation with IAEA to be strengthened
The International Atomic Energy Agency (IAEA) and Iran will "strengthen their cooperation and dialogue aimed at ensuring the exclusively peaceful nature of Iran's nuclear programme," a joint statement said.
"It was agreed that Iran and the IAEA will cooperate further with respect to verification activities to be undertaken by the IAEA to resolve all present and past issues."
That seemed in part to be a reference to a stalled IAEA investigation into suspected atomic bomb research by Iran, but it gave no detail on when and how that probe may resume.
An annex to the IAEA agreement listed six first steps to be taken by 11 February, including access to the Gchine uranium mine and a heavy water production plant near the town of Arak.
Under the accord on boosting nuclear transparency, Iran would also provide information about planned new research reactors.
It would also provide information for future nuclear power plants, as well as clarify earlier statements about additional uranium enrichment facilities it has said it plans to build.
The IAEA last visited the Arak plant - which produces heavy water for a nearby research reactor under construction – more than two years ago and now monitors it via satellite images.
The Arak reactor is of deep concern for the West as it may yield plutonium, a potential bomb fuel, once it starts up.
Iran has said it will make isotopes for medical and agricultural use.
The Gchine mine is located near the Gulf port of Bandar Abbas.
Its annual output is estimated at around 21 tonnes of uranium, which when refined can be used to fuel power plants but also to build nuclear weapons if enriched much further.
IMF plans to review Iranian economy in 2014
The International Monetary Fund plans to conduct a regular assessment of Iran's economy early next year.
This is the first time in over two years, IMF staff said after a visit to the country.
An IMF mission would allow the fund to take a closer look at the impact of Western sanctions and provide a sorely needed outside analysis of the economy and growth prospects.
The IMF last visited Iran for a full economic review in July 2011.
Sanctions targeted at Iran's disputed nuclear program have hurt trade and largely frozen Iran out of the international banking system since late 2011.
The head of the IMF, Christine Lagarde, met Iranian President Hassan Rouhani at the United Nations in September, a sign of a slight thaw in relations between Tehran and the West since Mr Rouhani took office.
In a statement after its visit on Monday, the IMF said it discussed Iran's high inflation and ways to restore economic growth, as well as its plans to address subsidy reform and other structural issues.