Iran’s top leader said on Sunday no deal would be better than a bad deal when it comes to negotiations with world powers over the country’s disputed nuclear programme.

Foreign minister Mohammed Javad Zarif, meanwhile, told a gathering of the world’s top diplomats and defense officials that “this is the opportunity” for a deal.

The United States and its five negotiating partners, the other members of the UN Security Council and Germany, hope to clinch a deal setting long-term limits on Tehran’s enrichment of uranium and other activity that could produce material for use in nuclear weapons.

Iran insists it has the right to enrich uranium and has demanded the lifting of crippling international sanctions. Tehran insists its nuclear programme is entirely peaceful despite western suspicions it has a military component.

Iran and the six-nation group – the US, Russia, China, Britain, France and Germany – hope to reach a rough deal by March and a final agreement by 30 June.

In remarks posted on his website, Iran’s supreme leader Ayatollah Ali Khamenei, who has the final say on all major decisions, said Tehran agreed with Washington that no agreement is better than an agreement that doesn’t meet its interests, without elaborating.

Zarif said now was the window of opportunity to come up with a final deal. He met individually at the Munich security conference with each country involved, except France which was scheduled later on Sunday.

“This is the opportunity to do it, and we need to seize this opportunity,” he said. “It may not be repeated.”

Following a 90-minute morning meeting with US secretary of state John Kerry, their second meeting on the sidelines of the conference, Zarif said he felt that progress had been made in the past months and suggested it would be unproductive to further extend negotiations.

“I do not believe another extension is in the interest of anybody,” he said. “We’re reaching the point where it is quite possible to make an agreement … and I do not believe anything will be different a year down the road.”

Zarif also suggested if it took slightly longer to come to an agreement than the set deadlines, it would not “be the end of the world”.

Zarif said all sanctions against his country should be lifted, saying that if they had been intended to stop its nuclear ambitions they had failed. He said when sanctions had been imposed, Iran had 200 centrifuges, and “now we have 20,000”.

“Sanctions are a liability, you need to get rid of them if you want a solution,” he said.

The possibility of an agreement with Iran prompted strong words from Israeli Prime Minister Benjamin Netanyahu, who told a weekly cabinet meeting on Sunday: “We will do everything to thwart a bad and dangerous deal that will cast a dark cloud on the future of the state of Israel and its security.”

The US State Department characterised Sunday’s discussion between Zarif and Kerry as “constructive”. In their meeting on Friday, Kerry pressed Zarif on the Obama administration’s desire to meet an end of March target date for the outline of a nuclear agreement.