UNITED NATIONS (Reuters) - The United States handed the U.N. Security Council a draft resolution on Tuesday that would expand U.N. sanctions against Iran by hitting its banking and other industries for refusing to halt nuclear enrichment.
The 10-page draft, agreed by the United States, Britain, France, Germany, China and Russia after months of negotiations, also calls for international inspection of vessels suspected of carrying cargo related to Iran's nuclear or missile programs.
The text, Western diplomats say, was the result of a series of compromises between the United States and its three European allies, which had pushed for much tougher sanctions against Tehran, and Russia and China, which sought to dilute them.
Few of the proposed measures are new. But Western diplomats said the end result was probably the best they could have hoped for, given China's and Russia's determination to avoid measures that might have undermined Iran's troubled economy.
The decision to circulate the resolution to the 15-nation Security Council was a tacit rebuff to a deal brokered by Brazil and Turkey and made public on Monday in which Iran agreed to send some enriched uranium abroad in return for fuel rods for a medical research reactor.
U.S. officials regard that deal as a maneuver by Iran to delay more U.N. sanctions.
Brazil's U.N. ambassador made clear her country was unhappy that the United States and its allies appeared to ignore the deal that her country has described as a major breakthrough in the long-running nuclear standoff between Iran and the West.
"Brazil is not engaging in any discussion on a draft at this point because we feel that there is a new situation," Ambassador Maria Luiza Ribeiro Viotti told reporters outside the Security Council chamber. "There was an agreement yesterday which is a very important one."
A Turkish diplomat, speaking on condition of anonymity, did not rule out discussions on the draft but said "our focus is on the other track" -- referring to the Tehran fuel swap agreement.
But U.S. Ambassador Susan Rice said the deal had "nothing to do" with the uranium enrichment that led to the threatened sanctions against Iran.
Iran rejects Western allegations that its nuclear program is aimed at developing weapons. It says its atomic ambitions are limited to the peaceful generation of electricity and refuses to suspend uranium enrichment.
The draft resolution "calls upon states to take appropriate measures that prohibit" the opening of new Iranian bank branches or offices abroad if there is reason to suspect they might be aiding Iran's nuclear or missile programs.
It also calls on states "to exercise vigilance over transactions involving Iranian banks, including the Central Bank of Iran" to ensure that those transactions do not aid Tehran's nuclear and missile programs.
It urges countries to be wary of dealing with Iran's Islamic Revolutionary Guard Corps and says some members and companies it controls will be added to existing lists of individuals and firms facing asset freezes and travel bans.
Another measure in the draft is a proposed ban on Iranian investment in sensitive nuclear activities abroad.
The draft, which would represent a fourth round of U.N. sanctions against Tehran, also calls for an expansion of an already existing arms embargo against Iran to include some further categories of heavy weapons.
Originally, the United States and its European allies had hoped to impose a total arms embargo against Tehran and blacklist its central bank, but diplomats said Russia and China had opposed those moves.
Diplomats said the European Union and United States would treat calls for "vigilance" against Islamic Republic of Iran Shipping Lines and other firms as bans and would pass regulations that go beyond any new U.N. measures.
Rice said the new resolution would make it more costly for Iran to continue to reject U.N. demands that it halt its enrichment program.
But she said the door was still open to Iran if it was ready to accept offers to resolve the crisis through dialogue. "The draft seeks to support, and not replace, our efforts to engage Iran diplomatically," she said.
Chinese Ambassador Li Baodong told reporters Beijing was looking for a "well balanced" resolution. He added that his country, which has close trade ties to Tehran, did not expect those relations to be harmed in any way.
"The purpose of sanctions is to bring the Iranian side to the negotiating table," Li said. "The sanctions are not for punishing innocent people and should not harm normal trade."
Russian Ambassador Vitaly Churkin said about the draft: "It's language we can live with." Both Churkin and Li welcomed the nuclear fuel deal announced on Monday.
Several Western diplomats said they hope the 15-nation council will vote on the resolution early next month.
The draft will likely be revised in the coming weeks.
Aside from Turkey and Brazil, council member Lebanon has made clear it would have trouble supporting sanctions against Iran. Lebanon, diplomats say, will likely abstain from a vote on the resolution because the Iranian-backed militant group Hezbollah is in its government.
Additional reporting by Patrick Worsnip, Emma Graham-Harrison in Beijing, Arshad Mohammed and Phillip Stewart in Washington; Editing by Paul Simao