The European Union, piling pressure on Iran after an attack on the British embassy, beefed up sanctions Thursday 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.
Spain, Europe's top importer of Iranian crude, said postponing a decision by several weeks was appropriate. "Spain will be able to seek alternatives," said Foreign Minister Trinidad Jimenez.
Oil from Iran in 2010 amounted to 5.8 percent of total EU imports, making Tehran the bloc's fifth-largest supplier after Russia, Norway, Libya and Saudi Arabia.
Spain represents 14.6 percent of Iranian oil imports to Europe, Greece 14.0 and Italy 13.1 percent.
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A Spanish diplomatic source said the foreign ministry has delayed the departure of its new ambassador to Tehran amid consultations" on the Iranian situation.
German Foreign Minister Guido Westerwelle said Iran faces a choice "between serious (nuclear) cooperation and international isolation."
Much of the international community fears Iran's nuclear programme masks a drive for a weapons capability, though Tehran insists it serves peaceful civilian energy and medical purposes only.
Before the new sanctions, the EU had already frozen the assets of 290 Iranian firms and 76 people. In July last year, it adopted measures aimed at preventing new investment, technical assistance and technology transfers, particularly those pertaining to producing and refining gas.
EU foreign policy chief Catherine Ashton, who leads global talks with Iran on the sensitive nuclear issue, reiterated a plea to Tehran to resume dialogue.
"We have put proposals on the table," she said. "It is for the Iranians to come back and if they don't come back and answer or at least put forward their own proposals, we have to draw conclusions."
Hague also urged Iran to return to the table and "negotiate meaningfully about its nuclear programme."
Israeli Defence Minister Ehud Barak ruled out a strike against Iran's nuclear facilities "for the moment", in remarks to public radio, but said the Jewish state would keep all options open.
"We should not engage in war when it is not necessary, but there may come a time or another when we are forced to face tests," Barak said.
Outraged by Tuesday's storming of the British embassy in Tehran, the EU ministers also said they considered "these actions against the UK as actions against the European Union as a whole".
They warned the "EU is taking appropriate measures in response", but did not specify what those would be.
Hague had asked EU counterparts to consider "whether they could do things in solidarity with the UK", according to Ashton.
"There was no requirement or request for a unanimous or one single approach," she told a news conference after the talks.
"I think the foreign secretary was very happy with what was said."
France, Germany, Italy and the Netherlands have recalled their ambassadors from Tehran for consultations while non-EU Norway temporarily closed its mission there in the wake of the incident.