VIENNA, Austria – Iran and world powers were nursing their wounds on Saturday after a bruising round of nuclear talks, but diplomats and experts remain hopeful a historic deal can still be struck by a July 20 deadline.

However, a top Iranian negotiator insisted Sunday that Tehran would not bend on its demand to keep operating the Arak heavy water reactor, which could give Iran weapons-grade plutonium. The issue could delay or torpedo the ongoing talks.

With three previous rounds already having taken place, the three-day session that ended in a rainy Vienna on Friday night had been billed as the clincher, where the leaders would finally put pen to paper and start drafting the actual text of the deal.

But it was clear from the exhausted expressions on the faces of Iranian diplomats and their counterparts from the five permanent members of the UN Security Council plus Germany that nothing is in writing yet.

“The gaps were too large to begin drafting the text,” said Iran’s chief negotiator Abbas Araqchi, adding that “no tangible progress” had been made.

“This has, candidly, been a very slow and difficult process, and we are concerned with the short amount of time that is left,” a senior US official said.

“Huge gaps remain. There is really more realism needed on the other side,” said another Western diplomat. “We had expected a little more flexibility.”

 Vice President of the European Commission Catherine Margaret Ashton, Iranian Foreign Minister Javad Mohammad Zarif, and Iranian ambassador to Austria Hassan Tajik attend the so called EU 5+1 Talks with Iran at the UN headquarters in Vienna, on May 14, 2014. (photo credit: AFP/Dieter Nagl)

Vice President of the European Commission Catherine Margaret Ashton, Iranian Foreign Minister Javad Mohammad Zarif, and Iranian ambassador to Austria Hassan Tajik attend the so called EU 5+1 Talks with Iran at the UN headquarters in Vienna, on May 14, 2014. (photo credit: AFP/Dieter Nagl)

On Sunday, Araqchi said Arak would continue to be a heavy water facility, Iran’s Press TV reported.

The issue of the heavy water production facility, which experts say can only be used to produce weapons grade material, has been a major sticking point between the sides.

In the talks, the sides were expected to come to a tentative agreement on re-engineering the reactor to a light-water facility or curbing its output, but Araqchi’s comments indicate Tehran will take a hard line on the issue.

He said the reactor would continue to operate at 40 megawatts of power, and said safeguarding Iranian rights were the country’s red line in talks.

Old demons

Negotiations are set to resume in the Austrian capital next month, officials said, but unlike in the previous rounds no set date was announced, and there was no joint statement.

The aim of the sought-after accord is to reduce the scale of Iran’s nuclear activities, easing fears it is seeking to construct a bomb, in return for a lifting of all sanctions.

At the heart of the debate is uranium enrichment, which can provide nuclear fuel but also the fissile core of a nuclear bomb. It is the same issue that has dogged diplomatic efforts for years.

The worry is that Iran could in theory use its 20,000 centrifuges — and newer, faster ones under development — to further purify its already considerable low-enriched uranium stockpile to weapons-grade.

The powers want Iran to slash the number of centrifuges, but Tehran denies wanting nuclear weapons and considers this is a “red line” that it will not cross. In fact, it wants to install more.

“The Western powers want to divide the number of centrifuges by four or five … while the Iranians believe that they need at least 50,000 for their future needs in research and nuclear power,” said Francois Nicoullaud, former French ambassador to Iran.

“The gap between these starting positions is immense,” Nicoullaud told AFP.

But it is not the only issue.

The International Atomic Energy Agency’s snail’s-pace probe into alleged “military dimensions” of Iran’s past nuclear work has also proved a point of contention.

This last issue is critical, said Mark Hibbs from the Carnegie Endowment for International Peace.

“Because the deal with Iran says that at the end of the day Iran will be treated no differently than any other state without nuclear weapons, the IAEA needs to know from Iran what its capabilities are related to nuclear weapons-making,” Hibbs told AFP.

Ups and downs

Diplomats insist the process was always going to be hard and that the gaps can be bridged before the July 20 deadline, when a six-month interim deal agreed to in November in Geneva expires.

“In any negotiation there are good days and bad days, and there are ups and downs. This has been a moment of great difficulty, but one that was not entirely unexpected,” the US official said on Friday.

“We believe we can still get it done,” she said.

Kelsey Davenport from the Arms Control Association agreed, saying the differences are “large, but not insurmountable.”

“Negotiators on both sides expected obstacles, but if they are willing to be flexible and creative, a deal can be reached,” she told AFP.

“The next few months will be critical, as they twist and turn the nuclear Rubik’s Cube to achieve a realistic deal with a strong base on which to build in the succeeding years,” Ali Vaez, Iran expert at the International Crisis Group, told AFP.