The talks, the highest-level between the two countries in half a century, pushed into the early hours of the morning, before a decision to reconvene the following day.
In a post on X, Iran's government said that after 14 hours, the talks had concluded and technical experts from both sides would exchange documents.
Iranian media are reporting that the two sides did not 'reach an understanding over their differences'.
The talks came as US President Donald Trump said his military was clearing the Strait of Hormuz - a claim denied by Iran.
The waterway, a major shipping transit point for fuel, is crucial to negotiations during a two week ceasefire agreement.
"We're now starting the process of clearing out the Strait of Hormuz as a favour to Countries all over the World," Trump posted, adding that Iranian mine-dropping vessels had been destroyed.
The US military said two of its warships had passed through the strait and conditions were being set to clear mines, while Iran's state media denied any American ships had transited the waterway.
Iran's Islamic Revolutionary Guard Corps warned that any attempt by military vessels to transit the Strait of Hormuz would be met with a strong response'.
Only non-military vessels would be allowed to pass under specific regulations, the IRGC said in a statement carried by Iranian media.
The talks in Islamabad were the first direct US-Iranian meeting in more than a decade and the highest-level discussions since the 1979 Islamic Revolution.
Trump has downplayed them , telling reporters that 'regardless of what happened, we win'.
Trump's Vice President JD Vance, special envoy Steve Witkoff and son-in-law Jared Kushner flew in on Saturday and met Iranian Parliamentary Speaker Mohammad Baqer Qalibaf and Foreign Minister Abbas Araqchi for two hours before a break, according to a source from mediator Pakistan.
The Iranian delegation had arrived on Friday dressed in black in mourning for Supreme Leader Ayatollah Ali Khamenei and others killed in the six-week war.
They carried shoes and bags of some students killed during the US bombing of a school next to a military compound, the Iranian government said.
"There were mood swings from the two sides and the temperature went up and down during the meeting," said another Pakistani source of the first round of talks.
The war has sent global oil prices soaring, killed thousands of people and seen unprecedented hits on Gulf Arab states.
Amid conflicting versions from officials and media in both nations, the US and Iranian sides appeared to remain far apart.
As well as release of assets abroad, Tehran is demanding control of the Strait of Hormuz, payment of war reparations and a ceasefire across the region, including in Lebanon, according to Iranian state TV and officials.
Trump's stated goals have varied during the campaign, but as a minimum, he wants free passage for global shipping through the strait and the crippling of Iran's nuclear enrichment program to ensure it cannot produce an atomic bomb.
Mutual distrust is high. "We will negotiate with our finger on the trigger," Iranian government spokesperson Fatemeh Mohajerani said on state TV.
The biggest ever disruption to the Strait of Hormuz has fed inflation and slowed the global economy, with an impact expected to last for months even if negotiators succeed in reopening the strait.
Nevertheless, three Liberian and Chinese-flagged supertankers did pass through the strait on Saturday, shipping data showed, marking what appeared to be the first vessels to exit the Gulf since last week's US-Iran ceasefire.
US ally Israel, which joined the February 28 attacks on Iran that launched the war, has also been bombing Tehran-backed Hezbollah militants in Lebanon.
More than 90 people were killed in Israeli air strikes across Lebanon on Saturday, the Lebanese health ministry said, bringing the war's death toll to 2,020 people, including 165 children, nearly 250 women and 85 medics.
Israel and the US have said Lebanon is not part of the Iran-US ceasefire.
