Powers agree modest new Iran sanctions draft

By Noah Barkin and Sue Pleming

BERLIN (Reuters) - World powers agreed on Tuesday on the outlines of a new sanctions resolution against Iran, but diplomats said the draft did not contain the punitive economic measures that Washington had been pushing for.

German Foreign Minister Frank-Walter Steinmeier said following a nearly 2-hour meeting with his counterparts from Britain, China, France, Russia and the United States, that the new draft would be presented to the U.N. Security Council in the coming weeks.

"We are united in the view that a nuclear armed Iran would have dramatic consequences for the Middle East and further afield," Steinmeier said.

"Today we together agreed on the content of ... a new resolution. Germany, France and Britain will submit a draft resolution in the coming weeks which will be discussed with the members of the Security Council."

The West has been engaged in a diplomatic showdown with Iran since 2002 and the Security Council has already imposed two sets of sanctions, in December 2006 and March 2007.

Iranian state radio, the Voice of the Islamic Republic of Iran, said the meeting had ended without a conclusion.

"The meeting of the foreign ministers of 5+1 group (Britain, China, France, Russia, the United States plus Germany) in Berlin ended with no results," the Iranian state radio said, according to monitoring of the broadcast by the BBC.

Voice of the Islamic Republic of Iran also said that U.S. Secretary of State Condoleeza Rice had declared prior to the meeting that there continues to be differences on the Iran issue among the Western powers.

Those powers do suspect Iran of pursuing an atomic bomb, but Iran says its nuclear work is for peaceful power generation.

Washington has spearheaded a months-long drive for new sanctions and had been pushing for a new resolution to impose a ban on business with leading Iranian state banks.

But that drive appears to have failed. Russia and China, both commercial partners of Iran, have hardened their opposition to tough sanctions since a U.S. intelligence report last month said Iran had halted its nuclear weapons program in 2003.

Iran vowed earlier on Tuesday that new sanctions would not stop it from pursuing its "legitimate and legal right" to nuclear energy.

WATERED DOWN

Steinmeier was the only foreign minister to speak after the meeting and the ministers left the podium without answering questions from journalists.

While the United States declared victory in getting agreement on the resolution, details were scant and it appeared the measures may have been watered down for a show of unity.