"In a situation like this, there are two options: either we will finally take steps that will isolate the country or we will try as hard as we can to talk to convince and make advances," Alliot-Marie during an RTL-Le Figaro-LCI radio and television debate.

"If we allow the country to close in, it will also mean that IAEA inspectors will not know what is happening" in Iran, she said referring to the watchdog International Atomic Energy Agency.

A spokesman for the French foreign ministry said Friday it was "premature" to speak of sanctions against Iran for resuming sensitive nuclear activities.

Instead it was necessary to "proceed step by step" after Thursday's meeting of the British, German and French foreign ministers in Berlin.

The European group of three had called for an extraordinary meeting of the IAEA board of governors to refer Iran to the UN Security Council.

Paris would "continue consultations" with China, Russia and its European partners on the issue, the spokesman had said.

Officials from China, the European Union, Russia and the United States are to meet over the Iran nuclear crisis in London on Monday.

Alliot-Marie said that "as long as there are a number of points which allow us to believe we can make advances we have to persevere because the day when Iran will be totally closed in we will no longer know what's going on."

She added that Tehran should be given the opportunity to play a role on the world scene, which she said was "a natural desire for a country like Iran".

Iran said Sunday it was "not scared" of being hauled before the UN Security Council and warned any sanctions over its disputed nuclear programme could cause an unexpected hike in oil prices.

The country this week resumed nuclear research -- involving small-scale enrichment to test centrifuges. It insists this is separate from full-scale uranium enrichment, which remains frozen for the time being.

Enrichment can produce reactor fuel but can also be extended to make the core of an atomic weapon. The West fears that if Iran is allowed to master the technology via this research work it would gain the know-how to make a bomb.

Britain, France and Germany have for more than two years been trying to convince Iran to voluntarily limit its nuclear activities in exchange for trade and other incentives.

But Iran has ruled out any such deal.

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