The outcome was a setback for the United States and France, which had sought swifter action to step up economic and political pressure on Iran over its refusal to halt uranium enrichment.

   

"We agree to finalise a text for a third UN Security Council sanctions resolution ... with the intention of bringing it to a vote ... unless the November reports of Dr. Solana and (IAEA chief) Dr. (Mohamed) ElBaradei show a positive outcome of their efforts," they said in a joint statement.

 

'Victory for unity'

   

A European diplomat involved in the process called it "a victory for unity over haste."

 

Russia and China opposed an early move to tighten economic sanctions, saying Tehran should be given more time to cooperate with the IAEA to shed light on its past activities.

   

Iran's foreign minister, speaking as the major powers met elsewhere in New York, defiantly said sanctions would not change what he called Tehran's "rational" nuclear policy.

   

Manouchehr Mottaki told the Asia Society: "Sanctions as a political tool for exerting pressure is ineffective in making Iran change its basically rational policy choice."

        

Condoleezza Rice, the US secretary of state, held separate back-to-back meetings, first of all six foreign ministers, then with just the three Europeans.

   

Diplomats said the purpose was to press the Europeans to take their own measures to restrict trade credits, investment and financial flows with Iran if Washington could not get Moscow and Beijing to agree to early U.N. action.

   

Many European officials were hesitant about acting outside the UN framework, arguing that the unity of the international community so far has surprised and shaken Iranian leaders, and that any split would be easy for Tehran to exploit.

   

"I believe that what impresses Iran the most is the unity of the six. Iran's strategy is to split the six but it hasn't succeeded so far," Frank-Walter Steinmeier, German Foreign Minister, said.

   

European investment in Iran is already falling dramatically -- British Foreign Secretary David Miliband cited a 40 percent fall in the first half of this year.