Iran said on Monday a US threat to form an independent coalition to impose sanctions if the UN Security Council failed to act over Tehran's nuclear programme was an insult to the world body.
The Los Angeles Times said on Saturday the US ambassador to the United Nations, John Bolton, had indicated Washington was prepared to act independently with close allies to freeze Iranian assets and restrict trade if the council did not do so.
Washington has previously called for a swift response if Iran does not heed the Security Council's Thursday deadline to halt uranium enrichment, a process that can make fuel for reactors or material for warheads.
"These remarks (by Bolton) are an obvious insult to the Security Council," Iranian government spokesman Gholamhossein Elham told a weekly news conference. "These remarks are just bullying and baseless remarks and show that they (the US) are not competent to be a member of the Security Council."
The Los Angeles Times said Washington planned to introduce a resolution imposing penalties soon after the August 31 deadline if the Islamic Republic's position did not change.
Analysts say opposition from veto-wielding powers Russia and China, big trade partners of Iran who see no imminent threat to peace from Tehran's nuclear programme, could delay any move. Iran has shown no sign it will halt enrichment, a process the West says Iran is using to build atomic bombs. Iran denies the charge, saying it wants only to generate electricity.
"The Islamic Republic has repeatedly announced that using nuclear weapons is not in our defence policies," Elham said. Bolton said Washington was working on a parallel diplomatic track outside the United Nations if Russia and China did not accept the resolution, according to the Los Angeles Times.
"You don't need Security Council authority to impose sanctions, just as we have," Bolton was quoted as saying. The United States has had broad restrictions on almost all trade with Iran since 1987. Some political analysts believe a US attempt to further isolate Iran outside the United Nations would betray a lack of international support for its approach.
"To go for sanctions outside the Security Council would be a sign of Washington's failure rather than success," US-based Iranian author and specialist Trita Parsi told Reuters. "Iran would point to it as a sign of Washington's inherently hostile attitude and argue the US is out of synch with the rest of the international community. The EU might see it as a US inclination to pursue policies it knows won't (work)."
Washington could probably count on close allies like Britain, Australia and some small east European states to join such a coalition, analysts say, but not necessarily on major allies like Germany, Italy and Japan which have significant commercial stakes in Iran and rely on Iranian oil exports.
French President Jacques Chirac urged Iran to reassure the world about its intentions. "Once again, I urge Tehran to send the necessary signals to create the conditions for trust. There is always room for dialogue," he said in a speech on Monday.
Iran has said it is ready for immediate talks but has refused to suspend enrichment before negotiations start, which was proposed in an incentives offer made by the United States, China, Russia, France, Britain and Germany.
International Atomic Energy Agency chief Mohamed ElBaradei said he hoped there was room for talks "in the next few days and weeks" to find a solution that would avert sanctions action.
"I still believe the only durable solution...is a political, diplomatic solution," ElBaradei said during a trip to Slovenia. He fears sanctions could prompt Iran to kick out IAEA inspectors and leave the nuclear Non-Proliferation Treaty, diplomats say.
Iran has shrugged off the threat of sanctions, saying such a move would propel already high oil prices higher still, hurting economies in industrialised countries more than Iran.