FACTBOX: Sanction scenarios over Iran's nuclear quest

(Reuters) - President Mahmoud Ahmadinejad said on Friday Iran should stand up to the world and pursue its nuclear program, after Tehran ignored a U.N. deadline to stop nuclear work which the West says will be used to make atom bombs.

Here are some of the key questions surrounding sanctions.

* WHAT IS THE SECURITY COUNCIL'S MANDATE NOW?

-- A Council resolution passed on December 23 imposed a global ban on transfers of technology and expertise to Iran's nuclear and ballistic missile projects. It also froze assets controlled abroad by people or entities associated with the two programs.

-- The Council would suspend steps toward sanctions if Iran suspended its enrichment, a precondition set by six world powers for talks on trade incentives offered to Tehran last year.

* IRAN'S STANCE ON ENRICHMENT

-- Iran says it already has what it needs to make nuclear fuel. It vows never to halt an enrichment program it says is for power generation only, to prepare for the day when its oil and gas reserves, the world's second largest, run dry. It wants to maximize fossil-fuel exports in the meantime.

-- Iranian officials have hinted Tehran could negotiate on the scope of the program, such as a guarantee to cap the level of enrichment at 4 percent, enough for power plant fuel but well short of the 80 percent threshold needed to detonate a bomb.

-- Western analysts believe Iran remains at least 2-3 years away from mastering the technology and attaining the "industrial scale" capacity needed to make bomb fuel, if that is its goal.

* WHAT WILL THE SECURITY COUNCIL DO NEXT?

-- If Iran defies it, the December 23 resolution authorizes the council to "adopt further appropriate measures" under Article 41 of Chapter 7 of the U.N. Charter, which encompasses commercial or diplomatic sanctions but excludes the use of military force.

-- New sanctions options could include a visa ban for Iranians linked to the nuclear program, a step blocked by Russia in negotiations on the first sanctions resolution. Sweeping economic and diplomatic embargoes look unlikely in the foreseeable future due to Russian and Chinese opposition.

-- Western leaders regard Iran as an urgent risk to peace, unlike Russia and China who are both key trade partners of Tehran and wield Security Council vetoes.

* SANCTIONS OUTSIDE COUNCIL MANDATE?

-- Frustrated by obstacles in the Security Council, Washington has leaned on EU allies to ban investment and export credits for Iran, as it has long done. EU leaders have resisted due to a lack of legal mechanisms, hefty stakes in what they see as legitimate business with Iran, and some misgivings about a U.S. policy to rapidly isolate rather than negotiate with Tehran, a major oil exporter and backer of Shi'ite militants.

-- A confidential EU study leaked last week said sanctions alone could not stop Iran if it actually sought nuclear weapons. EU diplomats say Russia and China could jump in as lenders to Iran if EU sources dried up.

* MILITARY ACTION AS A LAST RESORT?

-- U.S. and Israeli officials have mooted pre-emptive air strikes on Iranian nuclear sites as a last resort if diplomacy and sanctions prove futile. Faced with international jitters, Washington has repeatedly denied plans to invade Iran even as it has built up strike forces in the Gulf, and reiterated a commitment to diplomacy to resolve the crisis.

-- Even close U.S. allies oppose military action, fearing it would unleash Islamist militancy throughout the Middle East and beyond and still fail to destroy widely dispersed, well-hidden Iranian atomic sites.