Iranian negotiator Saeed Jalili said Tehran maintained its right to enrich uranium, and this view would have to be shared by the six powers before talks could take place.
"We had hoped to embark on a discussion of practical ways forward, and have made every effort to make that happen. I am disappointed to say that this has not been possible," Ashton told reporters.
She spoke at the end of two days of talks in Istanbul between Iran and the so-called P5+1 group of Britain, China, France, Russia, the United States and Germany, whose delegation she headed.
"No new talks have been planned," she said.
Jalili maintained Tehran's defiant stance at a separate press conference.
Iran "has the right to a combustion cycle, including the enrichment of uranium," under the terms of the nuclear Non-Proliferation Treaty, he said.
"This right must be recognised," said Jalili, adding that "we are ready for talks, even tomorrow" if the six powers were to accede to the long-standing Iranian demand.
Ashton said Iranian "pre-conditions relating to enrichment and sanctions" blocked progress, but stressed the powers were committed to pursuing a diplomatic solution to concerns that Tehran is secretly developing an atomic bomb.
The P5+1, she said, sought to negotiate a revised version of a nuclear fuel swap proposal, first discussed in 2009, and ways to improve transparency through monitoring measures by the UN atomic watchdog.
"The door remains open, the choice remains in Iran's hands," she said. "Our proposals remain on the table and... we are ready to start talking without preconditions the moment Iran is ready."
A US diplomat, speaking on condition of anonymity, also said, "The door is open... We continue to believe that there is time and space for diplomacy." Iran set the stage for a difficult round of negotiations as soon as the meetings began Friday, insisting that its sensitive uranium enrichment work was not up for debate.
Western sources familiar with the talks said the Iranians insisted on a recognition of their right to enrich uranium and the lifting of international sanctions as a pre-condition for talks on a possible nuclear fuel swap.
The powers believe the scheme could ease suspicions that Tehran's nuclear energy activities mask a military drive.
Under the original draft, Iran would have received fuel for a medical research reactor in Tehran from France and Russia in return for shipping out most of its stockpiles of low-enriched uranium.
After a prolonged stalemate, Brazil and Turkey brokered a modified deal with Iran in May.
But the United States rejected that accord, arguing it had failed to take into account additional uranium Iran enriched in the meantime, and led the UN Security Council in imposing a fourth package of sanctions.
The powers are known to be looking into a modified version of the proposal to take into account Iran's growing stockpile of low-enriched uranium.
A Western official praised "strong P5+1 unity" in Istanbul which "Iranians tested and then realised they could not fray."
The gathering was the second round of talks between Iran and the powers after talks resumed last month in Geneva, breaking a 14-month hiatus in diplomatic efforts to settle the dispute.
Iran insists its nuclear programme is peaceful, but has refused to suspend uranium enrichment, the sensitive process which can be used to make nuclear fuel or, in highly extended form, the fissile core of an atomic bomb.
Its defiance has prompted four sets of UN sanctions, coupled by a series of sanctions imposed unilaterally by the United States and the EU.
Washington believes the sanctions have already started to hamper Tehran's nuclear activities.
US Secretary of State Hillary Clinton said last week the sanctions had "made it much more difficult for Iran to pursue its nuclear ambitions" and forced it to "slow down its timetable."
But leading US scientists Friday warned against Western complacency, saying in a study that Tehran last year boosted its capacity to build a bomb.
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