"Wrong choice" will bring isolation, UK warns Iran

LONDON (Reuters) - Britain warned Iran on Wednesday it will suffer growing economic and political isolation if it makes the "wrong choice" and fails to comply with United Nations resolutions on curbing its nuclear program.

"The diplomatic track has to work -- the alternatives are appalling," British Foreign Secretary David Miliband wrote in a commentary in the International Herald Tribune newspaper.

Western powers suspect Iran, the world's fourth-largest oil exporter, of seeking to build nuclear arms. Tehran denies this, saying its nuclear program is for peaceful power generation. The standoff between the West and Iran has sparked fears of a military confrontation that would disrupt oil supplies.

Miliband insisted the diplomatic "dual track" approach -- combining increasing sanctions with the prize of economic and political cooperation if Tehran complies -- can still succeed.

"So we will continue to offer a clear choice: Come into compliance with the U.N. resolutions and be part of the international community, or remain in breach and suffer growing political and economic isolation," he wrote.

"There is a massive prize for Iran on offer from the international community if Iran is willing to behave like a responsible member of that community. We are determined to balance the tough punitive measures with generous incentives."

On Monday, the 27-nation European Union agreed new punitive measures against Iran targeting businesses and individuals the West says are linked to Tehran's nuclear programs.

The new sanctions were agreed after Iran rejected a June 14 offer of economic and other benefits proposed by the United States, Russia, China, Britain, Germany and France to try to convince it to halt uranium enrichment.

Miliband said the new deal encompassed a clear message and clear benefits, including "specific proposals to assist Iran to acquire everything it needs for a modern nuclear power industry" and "a long list of other potential benefits, from greatly improved political contacts ... to steps towards normalizing trade, economic and energy relations".

"Iran has a choice," he wrote. "If it continues to make the wrong choice, then it will not be the international community's policy that has failed, but the Iranian regime's."

(Reporting by Kate Kelland. Editing by Catherine Evans)