TEHRAN (Reuters) - Britain called on Wednesday for the U.N. Security Council to consider action against Iran after it resumed nuclear fuel research, but former Iranian President Akbar Hashemi Rafsanjani said any sanctions would be futile.
Iran removed U.N. seals at uranium enrichment research facilities on Tuesday and announced it would resume "research and development" on producing uranium fuel, prompting angry reactions from Washington, the European Union and Russia.
British Prime Minister Tony Blair vowed to haul Iran before the Security Council, which can impose punitive measures.
"I think the first thing to do is to secure agreement for a reference to the Security Council, (if) that is indeed what the allies jointly decide as I think seems likely," Blair told parliament.
"Then... we have to decide what measures to take and we obviously don't rule out any measures at all," he added.
Blair made no direct reference to military force, but his remarks seemed stronger than those of Foreign Secretary Jack Straw, who said on Tuesday military action was not on Britain's agenda and that he believed it was not on anyone else's.
Iran says its nuclear programme is entirely peaceful and the U.N. nuclear watchdog has found no firm proof to the contrary.
"Adopting harsh measures like imposing sanctions cannot bring about the desired outcome," Rafsanjani said at Tehran University in a sermon to mark the Muslim Eid al-Adha festival.
The foreign ministers of Germany, France and Britain will meet in Berlin on Thursday to discuss the crisis caused by Iran's move to reactivate a nuclear fuel programme mothballed under a November 2004 deal with the EU trio.
European diplomats say they expect an emergency meeting of the International Atomic Energy Agency's board of governors to take place, probably towards the end of the month.
EU diplomats say there is a clear simple majority on the IAEA's 35-nation board in favour of referring Iran to the Security Council. However, they said EU and U.S. officials would work to achieve as much consensus as possible.
Russia and China, which have major energy interests in Iran, have previously opposed moving the dispute to the Security Council, where they both wield veto powers.
However, Iran's latest action appears to have disconcerted Moscow. Russian Foreign Minister Sergei Lavrov discussed the row with U.S. Secretary of State Condoleezza Rice by telephone.
"Both sides...expressed deep disappointment about Tehran's decision to abandon the moratorium," a Russian foreign ministry statement said.
Iran's action rattled oil markets on Tuesday, helping push up the price of crude for a while.
Rafsanjani said diplomacy, not confrontation, remained the best way to solve the dispute.
"We will stand by our right to nuclear technology. They will regret creating any problems for us," he told worshippers.
Any embargo on Iranian oil exports would be a double-edged sword -- Iran is the world's fourth biggest crude oil exporter.
The United States already has a full embargo against Iran, but the EU could impose trade restrictions.
Neither the EU nor Washington is actively calling for sanctions against Iran, but any referral of the Islamic republic to the Security Council would bring that possibility closer.
The Council could impose sanctions ranging from travel curbs on government officials to a full trade embargo such as those previously imposed on Libya and Iraq.
EU3 TO BREAK OFF TALKS WITH IRAN
German Deputy Foreign Minister Gernot Erler said the "EU3" had no choice but to end talks with Iran unless it promised not to begin enriching uranium.
He said Iran's plan to resume research on uranium enrichment, a process that can produce fuel for atomic energy or weapons, violated a 2004 agreement in which Iran pledged to freeze enrichment-related work to ease fears it wants the bomb.
"There can be no further negotiations without a guarantee from Iran that it will not conduct any activities related to (uranium) enrichment," Erler told German radio.
Germany has issued some of the harshest EU condemnations of Iran's President Mahmoud Ahmadinejad, who has said he doubted the Holocaust happened and called for the destruction of Israel.
Rafsanjani, head of the Expediency Council which arbitrates on legislative disputes, called for more diplomacy.
"They cannot take this (nuclear) know-how from us. The issue could be resolved through patience and wisdom," he said.
The EU has not ruled out further talks with Iran but has made clear that Tehran would first have to re-suspend its nuclear fuel programme. Iran began reactivating this in August 2005 when it resumed uranium processing at its Isfahan plant.
(Additional reporting by Louis Charbonneau in Berlin, Madeline Chambers in London and Oliver Bullough in Moscow)
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