The talks in Belarus' capital, Minsk, ended "with no signature" on any proposals "after a couple of hours (of) discussions" relating to the bitter conflict that has killed thousands of people in eastern Ukraine, the diplomat said on condition of anonymity.
Discussions were unlikely to resume on Sunday, according to the diplomat.
"Differences were very wide and the atmosphere was described as not fruitful to agreement or cooperation," the diplomat said.
At the meeting were representatives of the Ukrainian government, Russian government and the Organization for Security and Co-operation in Europe, as well as representatives of the self-proclaimed Donetsk People's Republic and Luhansk People's Republic, Denis Pushilin and Vladislav Deinego, according to Ukraine's national news agency, Ukrinform.
The talks, which came on a week when fighting escalated in eastern Ukraine, had been expected to start Friday but were delayed.
A previous ceasefire agreement negotiated in Minsk in September crumbled long ago.
In the past 24 hours, 15 Ukrainian soldiers were killed and 33 were wounded, Ukraine's National Defense and Security Council said in its daily update on the situation.
The town of Vuglegirsk was the focus of the fiercest fighting on Saturday, the NDSC said, adding that separatist forces are trying to seize it so they can attack the town of Debaltseve afterward.
Debaltseve, northeast of Donetsk city, has been the scene of fierce fighting in recent days as separatist forces seek to surround Ukrainian troops.
Ukrainian authorities have evacuated 310 civilians from Debaltseve, the NDSC said.
But the town's residents remain at risk.
Twelve civilians have died in Debaltseve as the result of the militants' shelling, Vyacheslav Abroskiv, Donetsk regional police chief, reported on his official Facebook page. He said he was in the town and that the shelling was continuing.
Donetsk shelling condemned
The reports of civilian deaths in Debaltseve come a day after shelling in Donetsk city killed 12 people
, according to an official with the pro-separatist City Council.
CNN could not confirm 12 deaths in Donetsk, but its team in the city saw seven bodies after a series of shell blasts near the center.
It's not clear who is responsible for the shelling. In previous instances, each side has blamed the other.
The chief monitor for the OSCE mission in Ukraine, Ambassador Ertugrul Apakan, condemned the shelling of densely populated civilian areas in eastern Ukraine.
"Yet again, innocent civilians have been impacted by the crisis, and yet again we are seeing more bloodshed," said Apakan. OSCE monitors were on the scene in Donetsk city Friday to examine what happened.
"It should be understood that the main outcome of such violence is a surge in human suffering. I urge all sides to exercise maximum restraint, and fully assume their responsibility to prevent further displacement and suffering, and to redouble their efforts to reach a political settlement," he said.
The government in Kiev and its Western allies accuse Russia of fueling the violence by sending troops and military equipment over the border into Ukraine. Moscow denies the allegation, although it has said some Russian soldiers are fighting as volunteers.
From mid-April to January 21, the conflict killed at least 5,086 people and injured at least 10,948 others, according to the United Nations.