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U.S. Pushes for More Sanctions, Iran Warns of Economic Retaliation

Thursday, November 01, 2007

TEHRAN, Iran - President Mahmoud Ahmadinejad threatened unspecified

economic retaliation against European countries that follow the U.S. in

imposing unilateral sanctions against Iran, state radio reported Thursday.

A senior U.S. official, meeting in Vienna with the head of the International

Atomic Energy Agency, warned that Iran faces increased isolation and

heightened sanctions if it continues to defy the international community,

adding that he hopes the Islamic Republic will choose to negotiate.

The United States last week prohibited American companies from working with

the Iranian companies linked to the Revolutionary Guards, an elite force

with extensive holdings in oil, construction and other sectors. The U.S.

also put pressure on international firms and banks not to deal with the

companies.

"If they plan to cooperate with the enemy of the Iranian nation, we cannot

interpret this as a friendly behavior. We will show reaction," the radio

quoted Ahmadinejad as saying of the Europeans. "You, Europeans, know well

what will happen in the economic sphere if Iran takes a serious move in this

matter," the Iranian leader said.

Ahmadinejad spoke after a ceremony inaugurating a petrochemical complex in

the southern port of Asalouyeh, some 940 miles south of the capital, Tehran.

IRNA, the state official news agency, also quoted Ahmdinejad as saying:

"You, Europe, need us more" - a veiled reference to business ties between

Tehran and European nations.

According to official statistics Europe is Iran's largest trading partner,

with over 40 percent of Iran's imports coming from European Union countries.

Also, many European energy companies have been working in Iran's attractive

energy market, which is the second-largest oil producer among OPEC

countries.

U.S. Undersecretary of State Nicholas Burns said the U.S. wants the European

Union to push forward with further sanctions against Iran, and urged Iran's

major trading partners to cut back business with Tehran to send a strong

message

He told reporters that Washington wants a third set of U.N. Security Council

sanctions as soon as possible.

"Our view is that all of that should happen as soon as possible so that Iran

gets the message that as long as it's defying the Security Council, which it

currently is, and not cooperating fully with the IAEA ... then there's going

to be a price to what Iran does," he said. "And that price will be increased

isolation and heightened sanctions."

Burns noted that Iran did not accept an offer last week from EU chief

negotiator Javier Solana for further talks, saying Tehran had "chosen the

route of sanctions."

"We hope that Iran will reconsider, suspend its enrichment program and come

to negotiations with the United States and with the other countries" on the

Security Council, Burns said.

"That offer is on the table but Iran continues to refuse it," he said.

The U.S. and some of its allies claim Iran's controversial nuclear program

masks attempts to produce a nuclear weapon. Tehran denies it is seeking

nuclear arms and maintains its uranium enrichment program aims only to

produce electricity.

Iran is counting on international support from Russia and China - permanent

U.N. Security Council members - to prevent harsher U.N. sanctions. The U.N.

has imposed two rounds of limited sanctions for Iran's refusal to suspend

uranium enrichment, a process which can be used for both nuclear fuel for

electricity power plant and weapon.

Russia and China have resisted a third round of sanctions.

The Iranian president's comments came a day after the head of the

Revolutionary Guards warned the U.S. against attacking the Islamic Republic,

saying if it did, Washington would be "stuck in a quagmire" worse than Iraq

or Afghanistan.

Mohammad Ali Jafari, the Guards commander, said Wednesday his forces were

prepared to strike back with a "crushing response" if attacked, according to

the semiofficial Fars news agency.

Concerns have been mounting in recent months that the United States might

attack to prevent Iran from developing atomic bombs. The U.S. has said it is

trying to resolve its disputes with Iran diplomatically but also says it has

not ruled out any options.