"We have just had a very constructive consultation," China's UN Ambassador Li Baodong told reporters as he emerged from the closed-door meeting held at the US mission to the United Nations.
"We now have a better understanding of each other's positions. We will continue these consultations."
The meeting brought together envoys from the five veto-wielding members of the UN Security Council — the United States, Britain, France, Russia and China — plus Germany.
The French, British and Russian ambassadors also described the meeting as "constructive."
Diplomats earlier said envoys of four Western powers were trying to enlist the support of their Russian and Chinese counterparts for a fourth set of UN sanctions aimed at persuading Tehran to halt its uranium enrichment program.
On the table was a US draft resolution outlining sanctions in five areas: arms embargo, energy, shipping, finance and targeted punitive measures against Iran's powerful Revolutionary Guards, a diplomat familiar with the discussions said.
"We started to negotiate on the basis of the (US) text," said French ambassador Gerard Araud. "All six countries are on board (for future negotiations). We are getting into the substance. We are moving forward."
Russian Ambassador Vitaly Churkin said the six nations would meet again on the issue "very soon."
The United States and its Western allies believe Tehran is using uranium enrichment as a cover to build nuclear weapons, a claim Iran denies.
Diplomats said they anticipated drawn-out discussions on the US text and hinted that a vote by the full 15-member council might not take place until June.
In Washington earlier Wednesday, US Undersecretary of State for Political Affairs William Burns spoke of "a sense of urgency" in crafting a fourth UN sanctions resolution in the face of Iran's continued refusal to freeze enrichment.
"We are working aggressively to adopt concrete measures that will serve as a platform to strengthen and expand upon existing sanctions and target the power centers mostly likely to have an impact on Iran's strategic calculus," he told the Senate Armed Services Committee in Washington.
A top US military official meanwhile said Iran could make enough highly enriched uranium for a nuclear bomb in one year, but would likely not have the know-how to complete a weapon for 3-5 years.
General James Cartwright, the number two uniformed US officer, told the Senate Armed Services he was making "a historical estimate" not specific to Tehran and underlined that he could not predict "what problems they will encounter."
And Lieutenant General Ronald Burgess, the head of the US Defense Intelligence Agency, said Washington has not determined that Iran has decided to develop highly-enriched uranium.
Wednesday's ambassador-level meeting at the UN came two days after foreign ministers of Britain, China, France, Germany, Russia and the United States discussed the issue in Washington on the sidelines of a nuclear security summit.
The proposed US draft, which incorporates comments from Washington's European allies, includes sanctions targeting Iran's energy, arms, shipping and financial sectors, sources said.
But diplomats said Russia and China were opposed to any ban on investments in the energy sector and were likely to resist measures that would authorize seizures of cargo suspected of containing materials linked to Iran's nuclear activities.
The US draft would also expand sanctions against Iran's elite Revolutionary Guard Corps, a pillar of the regime and the driving force behind its controversial nuclear program.
Tehran maintains that its nuclear program is peaceful and solely geared toward electricity generation for its growing population.
It also argues that it is entitled to conduct uranium enrichment under the Nuclear Non-Proliferation Treaty, which it has signed.
