German Foreign Minister Joschka Fischer met his Iranian counterpart Kamal Kharazi on the sidelines of the UN General Assembly in New York for what the sources said were "very blunt" talks.

Fischer repeatedly warned his Iranian counterpart that following through with plans to enrich uranium would be a "miscalculation" by Tehran's Islamic regime.

"You are making a terrible mistake," Fischer told Kharazi, according to one participant.

"After the talks, the concerns have not diminished. On the contrary," a German diplomat said.

In a resolution on Saturday, the International Atomic Energy Agency demanded that Iran halt all activities related to uranium enrichment, a part of the nuclear fuel cycle that can be directed to both energy and weapons purposes.

Nuclear fuel cycle work including enrichment is permitted under the Non-Proliferation Treaty for peaceful purposes, but the IAEA wants Iran to stop pending completion of a more than 18-month-long investigation.

The resolution also gives Iran until November 25 to clear up suspicions over its activities or risk seeing the issue referred to the UN Security Council for possible sanctions -- something the United States has been pushing for.

"We are concerned," French Foreign Minister Michel Barnier said on Friday. "The international community needs to be reassured."

In his meeting with Fischer, Kharazi called for a unspecified "mechanism" to soothe concerns of the West while at the same time allowing Iran to make peaceful use of nuclear technology, the sources said.

Iran's leadership has refused to back away from efforts to master the entire nuclear fuel cycle, and has argued that the latest IAEA demands are "illegal."

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