Interior Minister Mostafa Pour Mohammadi, in a speech marking the 28th anniversary of the seizure of the US embassy in Tehran, said Iranians needed to cut back on consumption to ensure the sanctions had no effect.

"All of us in our households can bring down our consumption expenditure by 10 percent. Our culture of consumption needs to be changed. We need to send a call to the young people," he said.

"The sanctions I am sure will not affect and harm the Iranian people. But we should do everything to ensure our progress is not stopped," he told thousands of schoolchildren and students chanting "Death to America!"

"The cabinet is looking into this," he added.

Pour Mohammadi's comments appeared to refer to Iran's frenzied energy consumption, a serious issue ahead of winter when excess demand has caused gas shortages in the past.

He said that Iran's rationing of petrol, imposed this year to reduce dependence on foreign imports of refined oil, had already reduced consumption by 25 percent and was an example of what could be done.

The minister's cautioning remarks were in contrast to the usual official rhetoric over sanctions led by President Mahmoud Ahmadinejad, who has repeatedly brushed off sanctions as just "pieces of paper."

"I assure you that God willing the deceitful plots hatched by the enemy will be futile and the process of development will not be disrupted," Pour Mohammadi added.

Iran has already been the target of two sets of UN sanctions over its nuclear programme, and the United States and its Western allies are pushing for a third package that could hit the wider economy.

Western powers have also been acting unilaterally against Iran, most notably by putting pressure on its banking system.

Pour Mohammadi's comments come after political directors from six world powers agreed in London on Friday to push towards a third round of UN sanctions against Tehran if Iranian defiance continued.

However it appears that veto-wielding UN Security Council members China and Russia are unenthusiastic about further punitive actions, much to the frustration of the United States.

Washington accuses Tehran of seeking a nuclear weapon but Iran insists its nuclear programme is peaceful, and refuses to yield to the key demand of the West that it suspend uranium enrichment activities.

The United States has also never ruled out military action against Tehran to end its defiance, with US President George W. Bush raising the prospect of "nuclear holocaust" and "World War III" if Iran acquired atomic weapons.

Pour Mohammadi described such warnings as a "joke" that even the Americans did not believe, but nonetheless said Iran needed to show "national solidarity" at this time.

"We have to be steadfast and the plots will not harm us. The secret of national solidarity is what did away with military plots in the past by the enemy," he said.

His speech marked the anniversary of an event that led Washington to break off diplomatic relations with the Islamic republic, a rupture that has yet to be healed.

Iran still lauds the seizure as a revolutionary act while Washington condemns it as an abuse of human rights. Pour Mohammadi described the seizure as a "great and glorious event" that was still inspiring Iran.

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