Iran's foreign minister says he is hopeful Tehran and six world powers can begin drafting a preliminary nuclear deal later today after negotiations were extended in Switzerland.
Talks are scheduled to resume this morning in the Swiss town of Lausanne where the US, Britain, France, Germany, Russia and China have been working to break the negotiations deadlock.
A midnight deadline passed without any definitive agreement being reached over Tehran's nuclear programme, although negotiators agreed to a one-day extension.
Iran's foreign minister Mohammad Javad Zarif described the late night talks as "very good", adding: "We hope to start drafting the text on Wednesday".
President Barack Obama spoke with key national security advisors late on Tuesday amid suggestions negotiators were close to striking a deal.
Mr Obama was briefed by Secretary of State John Kerry and the Secretary of Energy Ernest Moniz.
Marie Harf, a spokeswoman for the US State Department, earlier confirmed an extension of the deadline.
"We've made enough progress in the last days to merit staying until Wednesday," she said.
"There are several difficult issues still remaining."
Western powers aim to stop Iran from having the capacity to develop a nuclear bomb, in exchange for easing international sanctions that are crippling its economy.
Stumbling blocks related to Iran's enrichment research and the speed of lifting the sanctions are threatening to scupper an agreement.
The aim is to reach an understanding that could serve as the basis for a final accord to be reached by the end of June.
The talks, which have lasted nearly two years, have already been extended twice since an interim agreement was reached in November 2013.
Most of the parties had indicated they did not want another extension, although they also said the interim agreement would remain in place until 1 July.
The six powers want more than a 10-year suspension of Iran's most sensitive nuclear work.
Tehran, which denies it is trying to develop nuclear weapons, is demanding a swift end to sanctions in exchange for temporary limits on its atomic activities.
Iran says it wants nuclear enrichment only for energy, science, industry and medicine.
But many countries fear Iran could use the technology to make weapons-grade uranium.
Israeli Prime Minister Benjamin Netanyahu, who opposes the negotiations, said the agreement being put together in Lausanne sends the message "that Iran stands to gain by its aggression".
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