US: The Bush administration is working outside the United Nations to persuade Europe and Japan to impose economic sanctions on Iran over its nuclear enrichment programme.
The US treasury department has drawn up a plan to target the financial assets of individuals Washington believes to be involved in Iran's nuclear programme, according to a report in yesterday's Washington Post.
The sanctions would restrict Tehran's access to foreign currency and global markets, close its overseas accounts and freeze assets held in Europe and Asia, but would not affect Iran's oil exports or impose a trade embargo.
The US has maintained unilateral sanctions against Iran for almost 31 years so the new plan would have little impact on American economic interests. The cost of the sanctions would instead be borne by European and Asian countries and by Iran itself.
In a memo to secretary of state Condoleezza Rice, the treasury department acknowledged that, although the sanctions would not be targeted at the Iranian people, they "can be expected to bear second-order consequences for the people of Iran".
European diplomats have given the plan a cool response, warning that Iran's response to the sanctions could damage western interests and make a resolution of the nuclear standoff more difficult.
"The sanctions could make Iran miserable, and Iran can respond by making everyone miserable back. In the end, the whole world is miserable and Iran gets to keep its nuclear programme," one diplomat involved in the negotiations told the Washington Post.
The plan would operate outside the UN Security Council's authority and would "not depend on recalcitrant countries", identified in one US government document as China and Russia, which have resisted the idea of sanctions.
EU countries have considered imposing targeted sanctions such as travel bans and asset freezes on top Iranian officials if Tehran rejects a package of incentives aimed at ending the nuclear enrichment programme.
Most European diplomats believe, however, that Washington must hold direct talks with Tehran if the nuclear standoff is to be resolved.
The Bush administration has not ruled out direct negotiations with Iran but does not wish to be seen to reward what it perceives as Tehran's hardline approach. President Bush has also refused to rule out military action, although most observers in Washington regard such a prospect as remote at present.
Downing Street has denied that the White House pressurised British prime minister Tony Blair to toughen his rhetoric on Iran in a speech at Washington's Georgetown University last week. The Sunday Telegraph reported that Mr Blair's aides told journalists three hours before the speech that he intended to say that "change should not be imposed" on Iran in the nuclear dispute.
Mr Blair eventually used more subtle phrasing: "I emphasise I am not saying we should impose change" - a shift the paper claims was prompted by White House pressure. A Downing Street spokesperson said it was "categorically untrue that any White House objective played any part" in the speech.