"The International Atomic Energy Agency underlines the rapid and worrying progress in Iran's nuclear enrichment programme, which everyone knows has no civilian end purpose," he told foreign diplomats based in Paris.

"The moment is coming when Iran's leaders will have to make a choice," he warned, as part of an annual foreign policy address.

"Either they provoke a serious confrontation with the international community or, and this is what France wants, we come to a negotiated deal in these talks which have been going on for, mark this, five years."

France, along with Britain, China, Germany, Russia and the United States, forms part of the six-nation contact group attempting to persuade Tehran to stand down its programme to enrich uranium in industrial quantities.

Iran insists the programme is intended to supply a civilian nuclear power industry, but many foreign capitals fear its true intent is to build atomic weapons and alter the balance of power in an already unstable region.

Under US and European pressure, the United Nations Security Council has imposed three rounds of targeted sanctions on Tehran's Islamic government, but has so far provoked only defiance from the regime.

Sarkozy insisted that the six powers negotiating with Tehran wanted an "open and direct dialogue" and added: "The hunt for an agreement is possible. Now, it's for the Iranian leadership to decide."

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