US Seeks Tougher Action in Iran Nuclear Standoff

Iran should face "punitive" measures after failing to respond to an international package of incentives that sought to defuse the crisis over its nuclear ambitions, the US said yesterday.

The warning followed Tehran's failure to give a clear answer to demands that it halt all nuclear activities in exchange for a freeze on further UN sanctions. Diplomats said the US was "livid" at the vague nature of a letter delivered to the EU foreign policy chief, Javier Solana.

The US had signaled its readiness to reopen a diplomatic interests section in Tehran nearly 30 years after relations between the two countries were broken off. It also sent a senior state department official to the July 19 talks in Geneva, where Iran was given a two-week deadline to respond.

But, underlining differences over the issue, Russia insisted yesterday that there was no deadline for Iran to answer or to accept a package of technological and economic incentives in return for halting uranium enrichment, which can be used for power generation and nuclear weapons.

EU officials also suggested the key was continuing dialog with Iran - though not at any price and not indefinitely.

Senior diplomats from the US, Britain, France, Russia, China and Germany held a conference call yesterday and agreed to pursue a fourth round of UN sanctions, probably in the financial sphere.

But Russia and China watered down the three UN resolutions passed since 2006 and little movement is expected before the UN general assembly convenes next month. "Informal contacts" between Solana and Saeed Jalili, Iran's nuclear negotiator, are to be allowed to continue.

"In the absence of a positive response to the generous offer that we provided for in our package, we think that the allies will have no choice but to take further measures that would be punitive," said a White House spokeswoman, Dana Perino.

"Iran has a clear choice: engagement or isolation. We regret that Iran's leaders appear to have chosen isolation," said the Foreign Office minister Kim Howells.