Rice warns of more sanctions on Iran

PALO ALTO (Reuters) - The United States will aggressively impose more sanctions on Iran as long as it refuses to give up sensitive nuclear work and uses the world's financial system for "terrorism," U.S. Secretary of State Condoleezza Rice said on Thursday.

On a joint trip to California with British Foreign Secretary David Miliband, Rice told reporters the Bush administration assessed "practically every day" whether to slap more sanctions on Iran.

"We will continue to designate entities as we find them trying to use the international financial system for ill-gotten gains and, yes, we are going to continue to do it and we will continue to do it aggressively," said Rice.

"Iran should not be in a position of using the banking system to pass profits made from terrorism or proliferation," she added.

Iran has been subjected to three rounds of U.N. Security Council sanctions over its nuclear program and last October, the United States designated the elite Qods military force of Iran's Revolutionary Guard a supporter of terrorism.

Washington also imposed sanctions on more than 20 Iranian companies, banks and individuals as well as the defense ministry, hoping to increase pressure on Tehran to stop uranium enrichment and curb what the United States views as terrorist activities. Tehran denies the charges against it and says its nuclear program is to produce energy.

Rice said Iran should expect more of these kinds of sanctions but she declined to provide any timeline.

"We continue to assess it practically every day. (U.S. Treasury Secretary) Hank Paulson and I have very close contact about that. This is not something we do as a political matter. It is something we do because the international financial system has got to keep its integrity," she said.

"It's important that I not get out ahead of any designations (new sanctions) that we might make," she added.

The five permanent members of the U.N. Security Council -- the United States, France, Britain, China and Russia -- and Germany, known as the P5+1, are awaiting a green light from Iran for a meeting to present a revised package of incentives.

The offer was first made to Tehran in 2006 to try to get it to give up uranium enrichment for a range of economic and diplomatic benefits. Iran, which is the world's fourth-largest oil producer, turned down those proposals and has so far refused to accept the main Western demand for a suspension of uranium enrichment, a process that can produce fuel for nuclear power plants or atomic bombs.

Rice said if Iran rejected the revised incentives package, it faced more sanctions at the United Nations.

However, the United States would face an uphill battle from veto-wielding Security Council members China and Russia, which oppose further punitive measures against Iran.

Miliband said Iran should not be seen as a victim of some kind of international vendetta, adding, "It is actually the author of its own misdeeds."

(Editing by Frances Kerry and Jackie Frank)