The only other driver from the leading trio of teams yet to triumph in Barcelona is Verstappen's Australian teammate, Daniel Ricciardo, but Red Bull has lagged Mercedes and Ferrari on pace so far this year. "This fight will continue on to the end of the season and we will be prepared for that battle".
As speed ramped up, Russian Grand Prix victor Bottas turned a 1:25.027, and Raikkonen beat that with a 1:24.691.
"We are obviously in a much better position, but it is still early", Vettel said.
Mercedes chief Toto Wolff says a lot of work has gone into understanding why, but admits there is no automatic fix.
"If you have another team that is fighting for the championship and you have a driver that is more than 20 points behind, he will need to do the same".
"It's definitely a step forward", he said of Mercedes' W08 upgrades.
Hamilton admitted he had enjoyed the challenge of driving in the changeable conditions, but acknowledged they made a lap more unpredictable - with "gusts of wind" having the potential to prove decisive.
But that will surely change, with the flow of upgrades set to speed up now that teams are closer to their factories, and Red Bull have some big chassis modifications in the pipeline and engine improvements still to come.
The track, located close to the city of Barcelona, is one of the venues used as a pre-season test circuit, so all of the teams already have experience and data of their 2017 specification cars on the track.
Hours of Rain in the Weekend Forecast, Weather Officials Say
We'll see a mix of sun and clouds today as a high pressure begins to move out of the area and highs are seasonable in the low 70s. Of interest are two other storms on the satellite, one off the Pacific Northwest coast and the other east of Nova Scotia.
"I didn't get everything together, I wasn't too happy but I can feel the auto is quick so that is good". But, despite a strong start, he was warned a year ago by Ferrari team principal Maurizio Arrivabene that he would have to earn his next contract after a below-par campaign.
Nico Rosberg, victor of the first four races in 2016, won the title last season with Mercedes, while Hamilton won the previous two championships.
And although tyres have played a role in the outcome, most notably Ferrari's two wins and Bottas' Bahrain Grand Prix struggles, the Finn reckons over time the tyres will have less of an impact on the race results.
In Russia past year Ferrari was 0.7 seconds off pole, but it fell to 1.1 seconds behind in Barcelona.
At the back of the field, it was a dismal day for home hero Fernando Alonso.
After failing to start in Russian Federation, he is just hoping his revised McLaren will be on the grid to take part in his home race this Sunday.
"I'm not sure what we can expect from this weekend", said the Spaniard.
The Mercedes drivers were evenly matched throughout the session, with Hamilton holding the edge by 0.089s on the early runs on the hard tyre. Raikkonen won the season-opener with Renault and Vettel won twice with Red Bull. Vettel went on to dominate, winning the last nine races to easily clinch the world title for the fourth time.