Iran faces sanctions

The European Union, piling pressure on Iran after an attack on the British embassy, beefed up sanctions yesterday over Tehran's nuclear programme and threatened to hit its oil and finances next.

Expressing 'deepening concerns' on the nature of Iran's nuclear activities, EU foreign ministers meeting in Brussels slapped sanctions on an extra 143 firms and 37 individuals.

The measures follow the publication last month of a report on Iran's nuclear sector by the International Atomic Energy Agency (IAEA).

With some European nations demanding even harsher action, a statement from the ministers threatened to 'extend the scope' of punitive action to strike at Tehran's economic heart.

It said the EU would examine measures targeting the financial system, energy and transport by late January.

'The EU made very clear that it will not bow to Iran's intimidation and bullying tactics,' said British Foreign Secretary William Hague.

'We will not back down,' he added, as French Foreign Minister Alain Juppe said the EU was eyeing 'unprecedented' new measures.

The White House welcomed the EU sanctions, saying 'these steps signal once again the resolve of the international community to address ... the continued failure of the Iranian regime to meet its international obligations'.

The crisis-hit EU is deeply split over slapping an oil embargo on Iran as well as calls by some, including Britain, to place an assets freeze on its central bank.

In Washington, US officials concerned about a possible fallout from sanctions gave only cautious backing for 'appropriately timed' measures against the Central Bank of Iran.

While Britain, France, Germany and Sweden favour barring oil purchases from Iran, several EU countries are major buyers and 'Greece has expressed some reservations', Juppe said.