A dispute over UN sanctions on Iran's ballistic missile programme and a broader arms embargo were among issues holding up a nuclear deal between Tehran and six world powers today, the day before their latest self-imposed deadline.

"The Iranians want the ballistic missile sanctions lifted. They say there is no reason to connect it with the nuclear issue, a view that is difficult to accept," one Western official told Reuters news agency. "There's no appetite for that on our part."

Iranian and other Western officials confirmed this view. The foreign ministers of the six powers - Britain, China, France, Germany, Russia and the United States - met with Iranian Foreign Minister Mohamed Javad Zarif - and were expected to meet again soon - to try to strike a deal by Tuesday night.

"The Western side insists that not only should it (Iran's ballistic missile programme) remain under sanctions, but that Iran should suspend its programme as well," an Iranian official said.

"But Iran is insisting on its rights and says all the sanctions, including on the ballistic missiles, should be lifted when the UN sanctions are lifted."

Separately, a senior Iranian official told reporters in Vienna on condition of anonymity that Tehran wanted a UN arms embargo terminated as well. A senior Western diplomat said a removal was "out of the question".

The deal under discussion is aimed at curbing Tehran's most sensitive nuclear work for a decade or more, in exchange for relief from sanctions that have slashed Iran's oil exports and crippled its economy.

The US and its allies fear Iran is using its civilian nuclear programme as a cover to develop a nuclear weapons capability. Iran says its programme is peaceful.

An agreement would be the most important milestone in decades towards easing hostility between the US and Iran, enemies since Iranian revolutionaries captured 52 hostages in the US embassy in Tehran in 1979.

An Iranian official told the semi-official Tasnim news agency the talks could continue until 9 July, echoing some Western diplomats. A White House spokesman in Washington said it was "certainly possible" the deadline could slip.

A deal could reduce the chance of any military strike against Iran's nuclear facilities, something Washington has refused to rule out, and the possibility of a wider war in the Middle East, where conflicts already rage in Iraq, Syria and Yemen.