The world's major powers told Iran on Thursday it must heed a UN call to curb its nuclear programme or face isolation, but Tehran refused to budge.
Britain said Iran could eventually face UN sanctions if it failed to suspend uranium enrichment, which can produce fuel for nuclear power stations or nuclear bombs.
In Doha, UN nuclear watchdog boss Mohamed ElBaradei said Iran posed no imminent threat and sanctions would be a bad idea.
"We need to lower the pitch," the head of the International Atomic Energy Agency (IAEA) said. "My message to Iran: the international community is getting impatient and you need to respond by arming me with information."
Iran says it wants only civilian nuclear power and rejected a UN Security Council statement adopted on Wednesday calling for an enrichment freeze and a report from the IAEA on Iranian compliance in 30 days.
Iran said in January it would resume uranium enrichment and began soon after on a small scale with a few centrifuges.
"Iran must decide between a self-imposed isolation through its continuation of enrichment...or a return to the negotiating table," German Foreign Minister Frank-Walter Steinmeier said.
He was speaking on Thursday after a meeting in Berlin of the five UN Security Council permanent members plus Germany.
British Foreign Secretary Jack Straw said the council might pass a legally binding resolution if Iran did not comply with the non-binding statement, opening the way to future measures against the Islamic Republic.
Asked if such action could include sanctions, Straw told reporters: "It could do." Diplomats have suggested sanctions could include targeted moves such as visa bans for politicians and scientists.
Straw added that if Iran backed down and complied, "then all sorts of good things, not bad things, will follow".
CLOCK RUNNING Both Steinmeier and US Secretary of State Condoleezza Rice dodged questions about sanctions.
"Now a 30-day period is running and it is Iran's move," the German foreign minister said.
Russia and China oppose any sanctions, let alone force, against Tehran and insisted on deleting portions of the UN statement that they feared could lead down that path.
Iran said its decision to pursue enrichment was irreversible and suggested the West was manipulating the Security Council. "We will not, definitely, suspend again the enrichment," Iran's IAEA ambassador, Aliasghar Soltaniyeh, told Reuters.
Oil climbed further above $66 a barrel towards its $70 record after Iran rejected the UN admonition.
"There's got to be a crunch point over Iran," said oil analyst Geoff Pyne. "At the end of the day Iran is intent on uranium enrichment and the West won't allow it."
The UN statement came after three weeks of haggling among the council's five veto-wielding members - Britain, France, China, Russia and the United States.
Germany and the five big powers had agreed on January 31 to report Iran to the Security Council over its nuclear activities.
NO MORE MIDDLE EAST TURMOIL Russian Foreign Minister Sergei Lavrov said neither Moscow nor Beijing would tolerate force and any plans to resolve the row "by compulsion and force are extremely counter-productive".
After the Berlin talks, Chinese Deputy Foreign Minister Dai Bingguo said there had "been enough turmoil in the Middle East. We do not want to see new turmoil being introduced to the region".
A senior US State Department official told reporters en route to Paris that the question of military action did not come up at the Berlin meeting, but hinted it could be raised someday.
"We are on a diplomatic track but we have not taken any option off the table," the official said, declining to be named.
Rice said the world must keep up pressure on Iran to suspend enrichment and return to negotiations.
She urged the other permanent council members and Germany to take into account Iran's calls for Israel to be "wiped off the map", as well as its support for Syria and Hizbollah in Lebanon.
Iran's decision to resume enrichment in January led Britain, France and Germany to halt 2-1/2 years of talks with Tehran and to back referring it to the Security Council.
The EU trio has offered to resume talks with Iran on condition that it re-suspend all enrichment-related activities.
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