Washington, perhaps coincidentally, has intensified financial action against Iran in the fortnight since the country ignored a UN deadline to suspend its uranium enrichment.

On September 8, the Treasury Department froze Bank Saderat, one of Iran's largest lenders with some 3,400 branches, from doing any business with US-owned banks on the grounds that it supports terrorism.

Treasury officials accused Saderat and Iran's central bank of channelling hundreds of millions of dollars, often through unwitting, "blue-chip" Western banks, to extremist groups and to the country's missile programme.

They said the outfits include the Lebanese Shiite militia Hezbollah and the Palestinian groups Hamas, Islamic Jihad and the Popular Front for the Liberation of Palestine-General Command.

Treasury officials have been fanning out around the world to ram home the message, especially in Europe and Gulf nations such as the United Arab Emirates.

US Treasury Secretary Henry Paulson was briefed on the issue after he took office in July, and the former boss of Goldman Sachs was said by aides to be shocked at the extent to which Iran was using front companies to allegedly abuse the banking system.

Speaking after the latest Group of Seven gathering here, he said Saturday it was crucial to protect the "safety, soundness and security of the international financial system" from extremists.

"We discussed the need to take action to disrupt terrorist and illicit finance related to specific threats from North Korea and Iran," he said after the G7 talks.

However, the G7 nations made no mention of either country in their post-meeting communique Saturday, speaking in more general terms of the need for cooperation against illicit financing.

Meanwhile, the United States has acknowledged that it faces tough resistance as it presses for UN sanctions against Iran over the nuclear issue, after Tehran ignored an August 31 deadline to freeze its enrichment activity.

Britain, France and Germany are optimistic that their talks with Iran are making progress towards defusing the standoff.

But President George W. Bush Friday warned US partners not to take pressure off Iran, which he suggested was playing for time.

"My concern is that, you know, they'll stall; they'll try to wait us out," said Bush, who will address the UN General Assembly in New York on Tuesday.

He said part of his objective in New York was to remind people that "stalling shouldn't be allowed".

The US government may have been emboldened by its recent wave of financial sanctions against North Korea, which it believes have dealt a real blow to the Stalinist state's reported forgery of US currency and money-laundering.

In line with the US sanctions on Iran, three major Japanese banks will refrain from doing business with Bank Saderat, reports in Tokyo said.

But Japanese Finance Minister Sadakazu Tanigaki said the G7 statement did not necessarily target Iran, which supplies much of Japan's oil.

And top European Union officials have made no mention of the Iran issue at their public appearances here.

One Gulf delegate at the Singapore meetings said regional markets in hubs such as Dubai had shown no reaction to the US clampdown.

"They see it as more of a US-generated fuss, as the Europeans aren't getting excited," he said on condition of anonymity.

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