* Not clear if end-March deadline can be met-U.S. official
* Says Iran has to make "very tough and necessary choices"
* Iran's Salehi: "I'm very optimistic." (Adds Steinmeier statement)
By Lesley Wroughton and Parisa Hafezi
LAUSANNE, Switzerland, March 16 (Reuters) - The United States and Iran inched closer to a political deal that would set the stage for a landmark nuclear agreement, but a U.S. official warned on Monday that Iran must make tough choices to allay fears about its atomic ambitions.
U.S. Secretary of State John Kerry and Iranian Foreign Minister Mohammad Javad Zarif held nearly five hours of talks in the Swiss city of Lausanne before the Iranian delegation headed to Brussels for meetings with European ministers.
After the Lausanne talks, a senior U.S. official said it was not clear if an end-March deadline for a framework agreement between Iran and six major powers could be met.
"We are trying to get there but quite frankly we still do not know if we will be able to," the official told reporters on condition of anonymity. "Iran still has to make some very tough and necessary choices to address the significant concerns that remain about its nuclear program."
The official did not elaborate but added that the Iranian delegation also raised in the meeting with Kerry an "ill-timed and ill-advised" letter from 47 Republican senators to Iran's leadership warning that they could undo any deal President Barack Obama made with them.
"These kinds of distractions are not helpful when we're talking about something so serious," the official added.
The U.S. official said the sides would work through the end of the month if needed to secure a deal. Talks are expected to resume on Tuesday.
Speaking to reporters in Brussels, French Foreign Minister Laurent Fabius said progress had been made in the talks but "important points" were unresolved. A statement from German Foreign Minister Frank-Walter Steinmeier said a deal could not be struck "at any price."
With the Iranian new year holiday of Norouz approaching this weekend, officials close to the talks say it will be difficult to complete a political agreement this week. If it is not possible by the weekend, the talks could reconvene in the final days of March.
Zarif said all sides needed to keep talking this week to see what could be achieved.
"On some issues we are closer to a solution and based on this we can say solutions are within reach. At the same time, we are apart on some issues," he told the Iranian news agency IRNA.
Six world powers -- the United States, Germany, France, Britain, Russia and China -- are trying to reach a political framework agreement with Iran by the end of the month that would curb Tehran's most sensitive nuclear activities for at least 10 years in exchange for the gradual easing of some sanctions.
The parties have set a June 30 deadline to finalize all the technical details of an accord. Western officials say privately that overcoming disagreements on some of the remaining sticking points would be very difficult.
Iran's Oil Minister Bijan Zanganeh, echoing Tehran's official view, said "unjust" Western sanctions should be lifted, the official IRNA news agency reported on Monday.
"We are ready to increase the oil export by up to 1 million bpd when the sanctions (are) lifted," Zanganeh said, adding that the boost "will not have an impact on the crude prices."
U.S. and EU sanctions that came into force in 2012 prohibit the import, purchase and transport of Iranian petroleum products, crippling the major oil exporter's economy.
The meeting between Kerry and Zarif included U.S. Secretary of Energy Ernest Moniz and Iran's nuclear chief Ali Akbar Salehi.
"I'm very optimistic," Salehi told reporters afterwards.
But a senior Iranian official doubted whether a deal would be reached this week as there were gaps on some important issues, although the atmosphere at the talks was good.
European Union Foreign Policy Chief Federica Mogherini told reporters the talks in Brussels had been helpful. "We discussed all the remaining open gaps and the way forward," she said.
A European diplomatic source, however, said substantial gaps remained and it was not clear they could be resolved in the coming days. "The talks were lengthy and in-depth, but they did not enable us to narrow our differences," the source said after Zarif met his French, German and British counterparts.
Kerry has urged Iran to make concessions that would allow the sides to reach a political framework agreement for a nuclear deal that would lift sanctions in exchange for tight restrictions on Tehran's nuclear program and increased monitoring of its atomic sites.
The West suspects Tehran of wanting to create an atomic weapons capability. Tehran denies that and says its research is for purely peaceful purposes.
In Brussels, British Foreign Secretary Philip Hammond also said a framework agreement was still some way off.
"There are areas where we've made progress, areas where we have yet to make any progress," he told reporters.
PROGRESS AND OBSTACLES
After their meeting in Brussels, the Iranian delegation will return to Lausanne for more talks with the Americans, and will be joined later in the week by senior European officials and possibly foreign ministers, depending on how the talks develop.
In Tehran, former nuclear negotiator and current parliament speaker Ali Larijani said failure to get an agreement would not be a tragedy.
The sides have twice extended the talks on a long-term accord that the United States says must have a duration of at least 10 years. They signed an interim deal in November 2013 that gave Iran limited sanctions relief in exchange for some limitations on sensitive nuclear work.
After months of deadlock, there have been areas of progress in the talks recently, Iranian, U.S. and European officials say. The number of enrichment centrifuges Iran wants to operate over the long term, one of the biggest sticking points in the talks from the beginning, is likely resolvable if Tehran can keep around 6,500 of the machines that purify uranium, they say.
There are also discussions about the size of Iran's uranium stockpiles and how much would be relocated to Russia or another country, Western officials say. Originally, Iran wanted to enrich 2.5 tonnes of uranium per year, but could settle at half a tonne, a senior Iranian official said. The remainder would be turned into fuel rods or sent to Russia, he added.
Recently the United States and France agreed to consider the possibility of a swift suspension of U.N. nuclear sanctions at the outset of any deal, in addition to freezing some of the most painful U.S. and European energy and financial sanctions.
The subject of lifting U.N. sanctions has turned into a sensitive one in the United States, where Republicans in Congress opposed to engaging Iran accuse Obama of seeking to bring an agreed deal to the U.N. Security Council first in an attempt to bypass U.S. legislators.
Difficult issues include Iran's insistence on pursuing advanced centrifuge research, Tehran's need to answer questions on past nuclear activities that could be arms-related, and the speed of lifting sanctions. Iran wants all sanctions lifted immediately but Western powers want them eased gradually. (Additional reporting by Louis Charbonneau in Lausanne, Sam Wilkin in Dubai and Adrian Croft and Robin Emmott in Brussels and John Irish in Paris and Michael Nienaber in Berlin; writing by Louis Charbonneau and Parisa Hafezi; editing by Ralph Boulton and Giles Elgood and Philippa Fletcher)
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