Ambassadors of the five veto-wielding permanent members of the Security Council - Britain, China, France, Russia and the United States - plus Germany have been holding closed-door consultations on the draft.
"We made a lot progress. This was the most productive session ... This brings us very close," US Ambassador to the United Nations John Bolton said.
He said the six ambassadors would report back to their respective governments for instructions prior to the next meeting in a few hours time.
"It was a very good working discussion. We managed to get more agreement," Britain's deputy UN ambassador Karen Pierce, said.
"This is all going to be discussed in our capitals and among ourselves over the next couple of days. We are moving forward."
She said ministers, including US Secretary of State Condoleezza Rice and her Russian counterpart Sergei Lavrov, would consider the issue on the sidelines of the Lebanon crisis talks in Rome.
Draft communique
France's UN Ambassador Jean-Marc de La Sabliere, who presides over the council this month, voiced hope that the six envoys would be able to present a text to the 10 non-permanent members of the council Wednesday afternoon.
He stressed that the main elements of the draft under discussion exactly reflected a communique adopted by their ministers at a Paris meeting on July 12.
Russian Ambassador Vitaly Churkin said: "We had a good discussion. We are moving rather smoothly toward our goal of having a draft resolution. We are not far away."
Ministers from the six powers tackling the Iranian nuclear issue decided earlier this month to send the Iran nuclear dossier back to the Security Council after Tehran failed to respond to a package of Western security and economic incentives in exchange for a suspension of its enrichment activities.
Iran reiterated on Monday that it will not halt uranium enrichment and top Iranian nuclear negotiator Ali Larijani has said Iran will respond to the nuclear offer by August 22.
The draft resolution discussed by the six envoys here would require Iran to suspend all uranium enrichment and reprocessing.