France says sanctions on Iran will be stepped up

France said on Tuesday it would continue to strengthen sanctions against Iran after negotiations in Moscow over its nuclear program ended without progress.

"We regret that Iran has still not made the concrete gestures that we were waiting for and that could constitute a first step towards respecting UN Security Council and IAEA resolutions," Foreign Minister Laurent Fabius said.

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He said that pressure on Iran would be increased with the full implementation of a European Union oil embargo beginning on July 1.

"Sanctions will continue to be strengthened as long as Iran refuses serious negotiations," Fabius said, adding that the six powers negotiating with Tehran would evaluate their next steps after technical meetings with Iran on July 3.

Iran and the six world powers blamed each other for deadlock at talks on Tehran's nuclear program on Tuesday, as negotiators struggled for a breakthrough to reduce the risk of a new Middle East war.

Late on the second and final day of talks, diplomats said negotiators were still far from agreement on Iranian work which the United States, China, Russia, Germany, France and Britain fear may be aimed at building nuclear arms.

The six powers want Tehran to stop enriching uranium to levels that bring it close to acquiring weapons-grade material, but Iran has demanded relief from economic sanctions and an acknowledgement that it has the right to enrich uranium.

If talks collapse, anxiety could grow on financial markets over the danger of higher oil prices and conflict in the Middle East because Israel has threatened to attack Iranian nuclear sites if diplomacy fails to stop Tehran getting the bomb.

"We did not come to Moscow only for discussions. We came to Moscow for a resolution. But we believe the opposite side is not ready to reach a resolution," an Iranian diplomat said.

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