McCain calls for divestment campaign against Iran

WASHINGTON (Reuters) - The world should launch a divestment campaign against Iran to curb its nuclear ambitions and reduce potential threats to Israel's security, Republican U.S. presidential candidate John McCain said on Monday.

McCain, an Arizona senator who has wrapped up his party's White House nomination, told a pro-Israel lobby group the United States should also impose financial penalties on the Central Bank of Iran, which he accused of funding terrorism.

"We should privatize the sanctions against Iran by launching a worldwide divestment campaign," McCain told a meeting of the American Israel Public Affairs Committee (AIPAC), comparing such a move to similar efforts that helped bring an end to apartheid in South Africa.

"As more people, businesses, pension funds and financial institutions across the world divest from companies doing business with Iran, the radical elite who run that country will become even more unpopular than they are already," he said.

McCain, the first of the U.S. presidential candidates to address this week's meeting of the influential Washington-based lobby group, called on the U.N. Security Council to increase political and economic sanctions on Tehran.

"Should the Security Council continue to delay in this responsibility, the United States must lead like-minded countries in imposing multilateral sanctions outside the U.N. framework," he said.

He said countries should restrict Iran's ability to import gasoline and other refined petroleum products, while regional powers and European nations should freeze Iranian assets and deny visas.

McCain and Democratic rivals Barack Obama and Hillary Clinton are all courting Jewish voters and are quick to articulate staunch support for Israel.

TALKS, SANCTIONS

Members of both political parties were in the audience on Monday. Many applauded McCain's sharp words and others held back during the Arizona senator's barbs at Obama, his likely Democratic opponent in November's general election.

McCain blasted the Illinois senator for not backing a measure designating Iran's Revolutionary Guard as a terrorist organization and repeated his disdain for Obama's support for talks with Tehran.

"The idea that (the Iranians) now seek nuclear weapons because we refuse to engage in presidential-level talks is a serious misreading of history," McCain said, citing unsuccessful efforts by President Bill Clinton's administration to engage with Iran.

"Even so, we hear talk of a meeting with the Iranian leadership offered up as if it were some sudden inspiration, a bold new idea that somehow nobody has ever thought of before."

Obama's campaign shot back.

"John McCain promises four more years of the same policies that have strengthened Iran, making the United States and Israel less safe," Obama spokesman Hari Sevugan said in a statement, adding McCain had refused to sign on to a divestment bill sponsored by the Illinois senator.

The National Iranian American Council, an advocacy group for Iranian Americans, said sanctions undermined diplomacy and did not work.

"Sanctions are not economic diplomacy, they are economic warfare," said Trita Parsi, the group's president, in a statement. "What is preventing the US from utilizing the leverage of existing sanctions is the failure to actually initiate direct talks -- a step Senator McCain opposes."

(Editing by David Wiessler)