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The US and Iran say they are confident of reaching a deal over Tehran's nuclear programme after agreeing a seven-month extension to talks, the BBC reported.

Iranian President Hassan Rouhani said a deal was close but US Secretary of State John Kerry warned that several points of disagreement remained.

Six world powers want Iran to curb its nuclear programme in return for the lifting of economic sanctions.

Tehran says it is not seeking nuclear weapons, but wants atomic energy.

The six countries - the US, UK, Russia, China, France and Germany - have been in negotiations with Iran to finalise a preliminary deal reached last year in Geneva.

They have now agreed to extend discussions, with the aim of reaching a high-level political agreement by 1 March, and confirming the full technical details of the agreement by 1 July.

Iran would be allowed to continue accessing $700m (£450m) a month in frozen assets during that period.

John Kerry said there are still some "significant points of disagreement"

Speaking in Tehran on Monday evening, President Rouhani said the gap between the two sides had "narrowed" during the latest round of talks in Vienna.

"It is true that we could not reach an agreement but we can still say that big steps have been taken," he said in an interview broadcast on state television.

Mr Kerry was more cautious, warning that although "substantial progress" had been made there are still "some significant points of disagreement."

"These talks are not going to get easier just because we extend them. They're tough. They've been tough. And they're going to stay tough," he told reporters in Austria's capital.