Iran Nuke Talks Extended for Lack of a Deal

U.S. Secretary of State John Kerry steps out as Britain's Foreign Secretary Philip Hammond, Russian Foreign Minister Sergei Lavrov, Iranian Foreign Minister Javad Zarif, German Foreign Minister Frank-Walter Steinmeier, French Foreign Minister Laurent Fabius, EU envoy Catherine Ashton and Chinese Foreign Minister Wang Yi (L to R) pose for photographers during their meeting in Vienna, Nov. 24, 2014. Joe Klamar/Reuters

VIENNA -The United States and its negotiating partners agreed today to extend talks with Iran over its nuclear capability, rather than concluding a long-sought deal by today's deadline.

Secretary of State John Kerry defended the decision to continue talks many in Congress and Israel see as futile.

"We don't want just any agreement. We want the right agreement," he said, explaining the delay.

Kerry said progress had been made over the past week on key sticking points, but declined to say which gaps remained.

"We would be fools to walk away," Kerry said. "It makes absolute sense to continue to talk."

He urged lawmakers in Congress not to rush to impose new sanctions because of this week's failure to reach a deal.

The talks, which have been conducted in Vienna, are now set to resume in December at a site yet to be determined, sources told ABC News.

The new goal is to reach a broad framework deal by March, with details of the arrangement to be hammered out by July 1 - essentially a seven month extension.

Kerry said that if no progress is made before March, the United States would "revisit" whether to continue negotiations.

In the meantime, an interim deal reached last year in Geneva will remain in place. Under that deal, Iran agreed to cap its nuclear enrichment in exchange for modest sanctions relief. Each month, some $700 million in frozen Iranian funds will be released. By the time this extension expires, that could provide Iran with nearly $5 billion in badly needed cash. Tough sanctions that prohibit Iran's lucrative oil sales would remain in place.

Kerry praised that interim deal, saying it made the world safer and earned negotiators some slack.

"We have earned the benefit of the doubt. We produced an agreement that has worked," he told reporters.

There had been hope entering this round of talks that the differences could finally be bridged after more than a decade of talks. In the end, Kerry said despite the failure, a deal is closer than ever and "achievable."

There were promising signs on the eve of the deadline, even after it became evident that an extension was likely.

On Sunday, Iran's President Hassan Rouhani sent a subtle message by posting a photo of himself on Instagram walking past a mural of the word "hope," written in Farsi.

As both sides work furiously towards the deadline, it was only hope that replaced optimism that a grand bargain could be reached by tonight's deadline.

By all accounts, the parties remain far apart.

The two sides remain deadlocked over the larger issues: how much nuclear capacity Iran would be left with, how long those restrictions would stay in place, and the scope and sequencing of sanctions relief it would receive in return.

As the clock ticked down, diplomats scrambled to find evidence of progress to prove that the process had not stalled. They were no doubt mindful that domestic politics in Iran and the United States could make a deal even more difficult after it slipped from their grasp this week.

In Iran, hardliners are expected to use the failure to reach a deal as evidence that Western powers cannot be trusted. The new Republican dominated Congress in the United States has also lost patience with the Obama administration's diplomatic efforts.

Israel's Prime Minister Benjamin Netanyahu, who says he would prefer no deal to what he believes is a bad one, stepped up public criticism of the process after being briefed over the phone by Kerry on Saturday night.

On Monday, Netanyahu praised the decision to hold off.

"The deal that Iran was pushing for was terrible," he told the BBC. "This result is better. A lot better."

One bright spot this week appeared to be the growing rapport between Kerry and his Iranian counterpart. Whereas their meeting would have been unimaginable years ago, this week they met at least eight times. Each time they shook hands and smiled for the cameras.

Kerry praised Iran's Foreign Minister Mohammad Javad Zarif after the talks concluded.

"He has approached to these negotiations in good faith and with seriousness of purpose, and that's what it takes to try to resolve the kind of difficult issues here," Kerry said.

Attention now turns to how the talks will resume. The December negotiations are expected to take place, at least initially, at lower levels.

Sidelines diplomacy is likely to continue as well. Oman's foreign minister, who has emerged as a go-between for Iran and the United States, was in Vienna this weekend, as was the Saudi foreign minister. Saudi Arabia remains wary of any deal that would boost regional rival Iran's standing. At the same time, Riyadh has warned that Iran obtaining a nuclear weapon could spark an arms race in the Middle East.

The only certainty is that the extension will make progress even harder down the road.