With Iran now under its first UN Security Council sanctions for defying the West, two prominent conservative newspapers on Tuesday printed editorials unusually critical of the president's style in handling the issue.

"One day you announce that we are installing 3,000 centrifuges, the next day you say 60,000. This gives the impression that what you say has not been well thought out," said the daily Jomhuri Eslami.

"At the very moment that the nuclear issue was about to move away from the UN Security Council, the fiery speeches of the president have resulted in the adoption of two resolutions (against Iran)," said Hamshahri.

The editorials by the two newspapers -- proudly conservative but not linked to the even more hardline factions close to Ahmadinejad -- came after the president's allies suffered their first defeat in December elections.

In a twin vote, an ultra-conservative cleric was trounced by former president Akbar Hashemi Rafsanjani in the election for a clerical assembly, and moderate conservatives and reformists won the most seats on local councils.

"There is a direct link between these articles and the results of the elections on December 15," said a leading conservative journalist, who asked not to be named.

"These two articles, which appeared in two important conservative newspapers linked to decision-making centres, show that the authorities prefer a rational approach based on negotiations and cooperation," added the journalist.

"These intemperate declarations (by the president) do not bring any help to solving the nuclear issue."

The daily Jomhuri Eslami likes to style itself as the mouthpiece of Iran's Islamic leaders but is also seen as close to Rafsanjani, a pragmatic conservative.

Hamshahri is directed by Hossein Entezami, an important member of the team of chief nuclear negotiator Ali Larijani at the Supreme National Security Council.

The paper expressed regret that negotiations between Larijani and EU foreign policy chief Javier Solana to find a way out of the nuclear crisis in 2006 ended in failure.

While the two men were negotiating, Ahmadinejad said Iran would refuse to suspend uranium enrichment "even for an hour".

Iran's reformists, led by their main faction the Participation Front, have already condemned Ahmadinejad's rhetoric on the nuclear issue.

Meanwhile, other moderate ex-officials who led negotiations on the nuclear standoff during the presidency of the reformist Mohammad Khatami up to 2005 have criticised government policy.

Rafsanjani's brother Mohammad Hashemi has called for a more moderate policy "to save the country from crisis".

"The foreign policy of the government ended in the adoption of two resolutions against Iran. These two articles show that officials have learned the lessons of failure and want to avoid a more serious crisis," said Mohammad Atrianfar, a former executive of the now banned paper Shargh.

"They want to exert more control on the president in order to prevent an aggravation of the situation," he said.

However Ahmadinejad, defiant as ever, lashed out at his critics by saying they were falling into a trap laid by Iran's enemies.

"The resolution voted by the enemies aims at allowing certain internal elements to weaken the will of the people and create a climate of fear and intimidation," he said in a speech on Tuesday.

earlier related report
US Sees Signs Financial Sanctions Against Iran Are Biting
Washington (AFP) Jan 10 - Weary of the drawn-out diplomatic battle to rein in Iran's suspected nuclear weapons program, Washington on Wednesday welcomed signs that unilateral US measures designed to squeeze Tehran financially are starting to bear fruit. The latest move came Tuesday when the US Treasury Department blacklisted Iran's fifth largest bank, Bank Sepah, for allegedly helping finance the country's illicit weapons programs.

The move bars the state-owned bank from carrying out transactions in US dollars -- a step which has wide implications in an interlocking global financial system heavily dependent on the US currency.

The impact swiftly spread to Europe, where Germany's second biggest bank, Commerzbank, announced Wednesday that it would stop handling dollar transactions for Iranian clients, though it would continue dealings in euros.

US officials said other international banks and businesses were also reassessing the wisdom of doing business with Iran, which was slapped with limited UN sanctions last month for refusing demands to suspend its nuclear enrichment program -- a possible step towards development of atomic weapons.

"Some financial institutions and other organizations are making a pretty dry-eyed assessment as to whether now is the right moment for them to be involved with" Iran, said State Department deputy spokesman Tom Casey.

"And if Iran continues down this path, then there may be further measures that will be taken against them," he told reporters Wednesday.

The UN sanctions were unanimously adopted by the Security Council, but only after months of difficult negotiations in which Russia and China -- both key economic partners of Iran -- succeeded in greatly watering down the measures.

The final sanctions package banned sales to Iran of materials and technology that could contribute to its nuclear and missile programs and froze the assets of 10 Iranian firms and 12 individuals linked to those sectors.

But it stopped short of more sweeping steps sought by Washington to isolate Iran.

Casey said this week's action against Bank Sepah fell under the terms of the UN resolution, but so far US allies in Europe, Asia and the Gulf have viewed the resolution more narrowly and not followed suit with similar financial restrictions.

Frustrated with the laborious pace of UN negotiations and the world body's uneven record in implementing sanctions, Washington already took action in September against another Iranian bank, Saderat, citing its alleged support for terrorism.

At the same time, senior US officials led by Secretary of State Condoleezza Rice and Treasury Secretary Henry Paulson were pressing allies to take financial action against Iranian firms allegedly involved in illicit activities.

"Over the past several months we have been sharing information with our foreign counterparts and key executives in the private sector about these deceptive practices and discussing how best to safeguard the international financial system against them," Treasury Undersecretary Stuart Levey said.

Underlying the message, was a tacit warning that foreign banks and companies could eventually lose access to the US financial system if found to be dealing with Iranian interests linked to terrorism or weapons proliferation.

Such leverage effectively extends the reach of the US measures against Iran into other countries which may not otherwise have chosen to take such action -- as witnessed by the decisions of several major foreign banks to restrict or cut off business with Tehran in recent months, officials said.

Similar US steps against a Macau bank accused of money-laundering and circulating couterfeit US currency on behalf of North Korea had the same kind of knock-on effect and was credited with helping entice Pyongyang back into nuclear disarmament negotiations late last year.

There have also been some signs that the pressure is beginning to fuel unease in Iran with the hardline regime of President Mahmoud Ahmadinejad.

Two conservative newspapers ran editorials Wednesday complaining that Ahmadinejad's unyielding and confrontational approach had led to the UN sanctions.

"I don't think the Iranian people think that being isolated from the rest of the world, being further cut off and being under sanctions is something they want to see happen," remarked the State Department's Casey.

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