The arms embargo was not overly important as Iran had developed its own industry, but global powers "must change their approach on sanctions if they want a deal," Iran's negotiator Abbas Araghchi said on state television yesterday, adding the final text and most of the annexes were "almost finished."
"Western nations must be prepared to give up sanctions," Araghchi said.
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US officials insisted however yesterday that there would be "ongoing restrictions on arms just like there will be ongoing restrictions regarding missiles" in any nuclear deal, which is to be endorsed by a resolution in the UN Security Council.
Negotiators are already drawing up a draft UN resolution which would also address the nuclear-related bans on arms trade and ballistic missiles, a senior administration official said.
Araghchi said there were only two or three main points blocking a deal, adding "the main text of the accord is almost finished, and there are only a few remaining brackets where ministers need to take a political decision."
Four of the annexes including on sanctions, nuclear cooperation and the Iranian nuclear programme were just about complete, he said.
Ministers were still working on a fifth annexe drawing up a timetable for which actions need to be taken when by both sides.
Araghchi also repeated that the Iran team was not working to any deadline and were ready to stay in Vienna several more days.
"Extending for several months is no longer being considered," he added.
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