Talks in Geneva on Iran's nuclear programme between Iran and world powers are to enter a third day on Saturday.
A US State Department official said at the end of Friday's talks that "we continued to make progress as we worked to narrow the gaps".
Russian Foreign Minister Sergei Lavrov and a senior Chinese diplomat are expected to join the talks on Saturday.
Under a deal being floated, Iran could freeze expansion of its nuclear activity for limited sanctions relief.
"There is more work to do," the American official told reporters after talks ended late on Friday evening.
Iranian Deputy Foreign Minister Abbas Araqchi echoed that sentiment, saying: "It was productive but still we have lots of work to do."
US Secretary of State John Kerry had met his Iranian counterpart Mohammad Javad Zarif and top EU diplomat Catherine Ashton for five hours on Friday evening.
Mr Kerry, who interrupted the itinerary of his tour to the Middle East and North Africa to join the talks, had earlier said that there were still "important gaps" between Iran and world powers.
The West has suspected Iran's uranium enrichment programme is a step towards building nuclear weapons - a charge Iran strongly denies.
UK, French and German foreign ministers have also joined the unscheduled talks with Iranian representatives in Geneva.
Russia's Sergei Lavrov had not been scheduled to attend but sources say he will travel to Geneva on Saturday.
Ending mistrust
For the first time in years, talks about Iran's nuclear programme are moving fast, the BBC's James Reynolds reports from Geneva.
The negotiations have also picked up new, critical purpose, he says - a chance for the US and Iran to explore an end to their three decades of mistrust.
However, although the sides appear closer to a breakthrough than during previous talks, the outcome still remains uncertain.
The Geneva talks involve the P5+1: the US, Russia, the UK, France and China as permanent UN Security Council members, plus Germany.
The French, German and UK Foreign Ministers - Laurent Fabius, Guido Westerwelle and William Hague - are also in Geneva.
Friday prayer leaders across Iran urged the public to support the country's nuclear delegation as it negotiated "from a position of strength and with dignity".
Mr Zarif said on Friday there was "the general outline of an agreement".
Although details of the suggested deal have not been disclosed, it is thought to offer Iran a gradual easing of sanctions in return for a freeze on expansion of nuclear activities.
Israeli rejection
Meanwhile, President Obama telephoned Israeli Prime Minister Benjamin Netanyahu on Friday to allay fears about any deal.
A White House statement said Mr Obama had updated the Israeli leader on the talks in Geneva, and repeated his commitment to stopping Tehran getting a nuclear weapon.
Israeli Prime Minister Benjamin Netanyahu had earlier said he "utterly rejected" such a deal with Iran, its long-time enemy, and that his country would not be obliged to abide by it.
The Israeli prime minister argued the Iranians were getting sanctions relief while "not reducing in any way their nuclear enrichment capability".
Israel, Mr Netanyahu said, would do "everything it needs to do to defend itself and the security of its people".
He has said Israel is committed to making sure Tehran never gets a nuclear weapon. Defence analysts have speculated the Israelis may take military action to disrupt Iran's programme.
White House spokesman Josh Earnest said that any criticism of a deal was "premature".
"There is no deal, but there is an opportunity here for a possible diplomatic solution, and that is exactly what [President Obama] is pursuing," he said.
Since 2006 the UN Security Council has imposed a series of sanctions - including asset freezes and travel bans - on entities and people involved in Iran's nuclear programme.
Separate US and EU sanctions have targeted Iran's energy and banking sectors, crippling its oil-based economy.
The head of the UN atomic watchdog, the International Atomic Energy Agency, Yukiya Amano, is travelling to Tehran on Monday to meet senior Iranian figures.
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