"The United States backs (Sarkozy's suggestion) but Berlin is against it," a source close to German Foreign Minister Frank-Walter Steinmeier was cited as saying.

Sarkozy's spokesman David Martinon has said France wants its European partners to take their own economic steps to punish Tehran, in parallel to the drive to secure new UN sanctions.

Martinon said the measures envisaged "could even be taken without there being a common text between the Europeans."

Steinmeier, who will next week attend a meeting on Iran in New York with the five permanent members of the UN Security Council, is preparing his arguments for a "stormy" debate, the magazine said.

It said the German minister would point out that the line adopted by Washington and Paris was ambiguous as several of their leading companies were present in Iran.

Iran on Saturday showed off a 1,800-kilometre (1,100-mile) missile in public for the first time and claimed it's range included US bases in the Middle East and Iran's arch enemy Israel.

Iranian President Mahmoud Ahmadinejad told the military parade in Tehran that psychological warfare and sanctions would not halt Iran's nuclear drive.

"Those who think that with outmoded instruments like psychological warfare and economic sanctions they can stop Iran's march towards progress are making a grave mistake," he said.

According to media reports, there are significant differences between Europe and the United States on one side and Russia and China on the other, with the latter countries against imposing further sanctions for the moment.

The UN Security Council has already issued two resolutions imposing sanctions to punish Iran's refusal to suspend sensitive uranium enrichment operations, which the West fears could be used to make nuclear weapons.

However Tehran insists that its nuclear programme is aimed solely at producing energy for a growing population.

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