The European Commission has said Switzerland will have to treat citizens from the EU's current and new eastern European member states equally when deciding their right to enter the state.
The bloc is currently in talks with non-EU memberSwitzerland to extend access for EU citizens to the country to the millions of eastern Europeans who join the EU in May.
But the Swiss government wants restrictions to curb their access.
"The European Union is not able or willing to accept anydiscrimination between new member states and current member states," the Commission's external relations spokesman Mr Diego de Ojeda said.
Immigration fears in Switzerland were expressed by voters this weekend as right-wing People's Party (SVP) topped polls.
But Berne, still headed by a four-party left-to-rightcoalition, says its wish for a transition period would simply put it on a par with existing EU states.
Berne argues that even if it is not a member of the EU it should have the same rights as EU states to impose a seven-year transition period on opening the jobs market to citizens from new EU member states.
It also warned any deal would unlikely enter force until 2005 as it would be subject to a referendum.
"The argument is that we are aware that we are not an EUmember state but that does not mean you can treat us in a less advantageous way," a Berne official said.
Sources in Berne said they were hopeful a deal on freemovement for the new EU states would be reached but EU officials warned failure could affect other agreements with the bloc.
In a statement, the Commission added that until 2014Switzerland did have the possibility of using certain safeguards to curb immigration in cases of massive influxes of migrants.
EU officials said that if a deal was not reached by May,when 10 mainly central and eastern European join the bloc, the one way of achieving non-discrimination would be to terminate the existing deal on free movement between Berne and Brussels.