Iran warns against new sanctions

BERLIN (Reuters) - Iran warned the U.N. Security Council on Tuesday against imposing more sanctions over its nuclear work, saying it was like "playing with a lion's tail" as its top negotiator met Germany's foreign minister.

The talks in Berlin between Ali Larijani and Frank-Walter Steinmeier, coming two weeks after a negative U.N. nuclear watchdog report on Iran that could trigger tougher sanctions soon, ended without any sign of a breakthrough.

Asked whether progress had been made in his meeting with Larijani, Steinmeier replied: "I cannot say that ... I cannot tell you whether we will come to a result."

It followed talks in Madrid last week between Larijani and EU foreign policy chief Javier Solana that yielded no headway in resolving the core dispute -- Iran's refusal to suspend uranium enrichment as a precondition for negotiations on trade benefits.

The meeting also came on the eve of a Group of Eight (G8) summit in the German resort of Heiligendamm where industrialized nation leaders will discuss what "steps should be taken next" on Iran, among other issues, a senior German official said.

Iranian President Mahmoud Ahmadinejad said it was too late for anyone to reverse Iran's nuclear course, which Tehran says is a peaceful quest for electricity, not for atom bombs.

"They should be aware that Iran is a big country. Some say Iran is like a lion sitting calmly in the corner. We advise them not to play with a lion's tail," he told visiting foreign journalists in Tehran. "Iran's (nuclear) move has passed the point where they (Western countries) could stop it."

FAR FROM SOLUTION

France's Foreign Minister Bernard Kouchner said he welcomed Solana's tough stance with Iran.

Speaking through an interpreter, Kouchner said: "The situation is far from being resolved."

The Security Council has imposed two rounds of sanctions since December and Washington says Iran faces a harsher resolution after the U.N. watchdog reported Tehran was rapidly expanding its uranium enrichment work.

Ahmadinejad said the Security Council should avoid what he termed illegal measures against Iran.

"They observed that previous sanctions had no effect on Iran's nuclear activities and we have told them not to enter this path. They cannot harm our nation."

Iranian officials have repeatedly shrugged off the impact of sanctions, one of whose targets is a major Iranian state bank. Although sanctions are narrowly focused, economists say they are now deterring both foreign and local investors.

Some diplomats said Iran wanted to make it clear in Berlin it could harden its position if the G8 adopted a tougher stance.

Iran hoped to get Germany to back a softer line, possibly an interim solution, they said. "They consider Germany the weak link," one European diplomat said on Tuesday.

Washington, Britain and France have rejected a face-saving proposal from the U.N. atomic watchdog chief under which Iran's enrichment would be capped short of the industrial scale it has yet to reach -- the level where enough enriched uranium would be stockpiled for potential diversion into bomb-making.

(Additional reporting by Madeline Chambers in Berlin, Parisa Hafezi and Edmund Blair in Tehran)