US and EU plan Iran sanctions

The US and its allies are discussing a "coalition of the willing" that would impose sanctions on Iran's energy and financial sectors without United Nations backing as concerns increase about Tehran's accelerating nuclear programme and a possible Israeli military response.

A foreign policy adviser to Barack Obama, the Democratic presidential nominee, recently helped to write a re-port that warned: "The Europeans make war more likely if they do not strengthen sanctions against Iran."

The September report was produced by the Bipartisan Policy Center, a Washington-based think-tank, with the co-operation of Dennis Ross, perhaps Mr Obama's most influential adviser on the Middle East. While backing an intensive diplomatic effort, it calls for immediate military steps to deal with Iran, such as "pre-positioning additional US and allied forces, deploying additional aircraft carrier battle groups and minesweepers [and] emplacing other war mat-eriel in the [Gulf] region".

Referring to discussions about a possible Israeli strike on Iranian facilities, a European diplomat told the Financial Times: "As we go along 2009, you're going to hear more and more about it [military action]." He added there was a growing consensus that Tehran could have sufficient fissile material for a bomb by the end of next year.Iran insists its nuclear programme is purely peaceful.

The diplomat said that, in light of concerns, European countries and the US were planning to impose sanctions on Iran's energy sector as "like-minded countries" - rather than through the UN - and were discussing targeting exports of engineering products for Iranian refineries as well as refined oil itself. He said that after a largely empty UN resolution this month, western countries had concluded: "If there is another [resolution] it will take a lot of time and there will be very little substance in it."

Another western diplomat said: "The idea would be to get together a coalition of the willing . . . given the difficulties we would have getting this past Russia and China [in the UN]."

"Iran has a limited refining capacity, so they rely on petrol imports . . . We are therefore working on targeting investment in the Iranian refinery industry," he said, adding that measures, which might also target the financial sector, could be agreed in early November. "You would try and stop investment in new projects inside Iran, preventing extraction and transportation," he said. Iran meets about one-third of its petrol needs through imports, estimated to cost more than $10bn (€7bn, £6bn) this year.

While Israel may ultimately be ready to launch a military strike against Iran's nuclear facilities,it is for the time being looking for other solutions.

It supports UN-led efforts to impose sanctions, al-though it has repeatedly called for a tougher line.

By Daniel Dombey in Washington and James Blitz in London.

Additional reporting by Tobias Buck in Jerusalem and Najmeh Bozorgmehr in Tehran