But foreign ministers from the five permanent United Nations Security Council members plus Germany insisted that the door remains open to negotiations if the Islamic republic were to back down.

"We're deeply disappointed that ... Iran is not prepared to suspend its enrichment-related and reprocessing activities as required by the IAEA board and made mandatory in Security Council resolution 1696," said British Foreign Secretary Margaret Beckett, speaking on behalf of her counterparts.

"Accordingly we will now consult on measures under article 41 of chapter 7 of the UN charter as envisaged in that resolution," she added after crunch talks in London.

Article 41 allows the Security Council to impose diplomatic and economic sanctions on member nations to enforce compliance with its resolutions.

"We decided in unison to work together in the coming days" on "sanctions which are proportionate and reversible," said French Foreign Minister Philippe Douste-Blazy.

"The door to dialogue will remain open," he added.

The US State Department's number three Nicholas Burns said the six world powers would start drafting next week a Security Council resolution imposing sanctions.

"We will begin next week to debate the sanction regime at the UN.

"The decision we made was we will go for sanctions. The question is what the extent of the sanctions will be."

Beckett noted that the international community had told Tehran in Vienna, at a crunch meeting of the International Atomic Energy Agency (IAEA), that there were two paths ahead in the stand-off.

"We regret that Iran has not yet taken the positive one. We will continue our efforts to find a negotiated solution and our proposals of June 1 remain on the table," she said.

Washington has long led charges that Iran's nuclear programme is a covert grab for atomic weapons, something that Tehran has hotly denied. It argues that the nuclear programme is purely for civilian energy purposes.

European Union foreign policy chief Javier Solana has held a series of talks with Iranian negotiators in recent months in order to get them to consider the EU trade proposals in exchange for halting nuclear enrichment, but pressure for an accord intensified after Iran failed to meet a UN deadline by August 31.

Solana acknowledged ahead of the meeting that diplomacy may have run its course, saying: "It is up to the six countries to decide whether the time has come to follow the second track -- referring the case to the Security Council."

Russian Foreign Minister Sergei Lavrov, whose country has been hesitant about US-led calls for sanctions on Tehran, reiterated Friday that the standoff still could be resolved through negotiations.

"All the measures that could be considered should be aimed exclusively at pushing Iran back to the negotiating table. That is the only way," Lavrov told journalists.

He also said Russia would hold consultations in the Security Council on measures to urge Iran to accept the June proposals.

The United States, and latterly Britain, are now leading moves to draft a resolution calling on the UN Security Council to impose sanctions which could go before the world body as early as next week.

A spokesman for British Prime Minister Tony Blair underlined the need for a united front over the crisis.

"What we know works is when we work together with our international partners," he said ahead of the talks.

Rice has said the United States wants a graduated series of sanctions, to be implemented through multiple UN resolutions that would ramp up pressure on Iran if it persists with its nuclear programme.

The first set of measures is expected to focus on preventing the supply of material and funding for Iran's nuclear or ballistic missile programmes.

Other steps could include asset freezes and travel bans on officials linked to possible Iranian weapons programmes.

All rights reserved. � 2005 Agence France-Presse. Sections of the information displayed on this page (dispatches, photographs, logos) are protected by intellectual property rights owned by Agence France-Presse. As a consequence, you may not copy, reproduce, modify, transmit, publish, display or in any way commercially exploit any of the content of this section without the prior written consent of Agence France-Presse.