Demonstrators break into Tehran compound during anti-British protests, burning the UK flag and forcing staff to flee.
Britain might soon announce further sanctions of its own in addition to the latest round of US sanctions aimed at pressuring Iran to drop its nuclear programme.
A group of European foreign ministers were meeting in Brussels on Thursday to discuss tougher sanctions, but they are divided on whether to impose an embargo on Iranian oil, which would probably boost global oil prices.
William Hague, the British foreign secretary, declined to comment on a possible embargo, but voiced optimism about stronger sanctions before the meeting.
“I hope we will agree today additional measures that will be an intensification of the economic pressure on Iran, peaceful legitimate economic pressure, particularly to increase the isolation of the Iranian financial sector,” he said.
Guido Westerwelle, the German foreign minister, said an embargo would cut the budget available for Iran’s nuclear programme.
Other steps have already been decided: the EU is expected to add nearly 200 names to a list of people and entities targeted by European sanctions.
Britain has responded to the storming its embassy in Tehran earlier this week by downgrading its diplomatic ties with Iran.
Hague announced on Wednesday that the UK had shuttered its embassy in Tehran. Britain also closed the Iranian embassy in London, and gave Iranian diplomats 48 hours to leave the country.
Germany, France and the Netherlands have all recalled their ambassadors to Tehran in solidarity.
Iran, for its part, has released 11 protesters detained for the embassy assault, the semi-official Fars news agency reported on Thursday.
The men was arrested on Tuesday for storming and ransacking the diplomatic compounds. There was no immediate explanation for their release; under Iranian law, damaging property carries a prison term of up to three years.
The attack followed an apparently state-sanctioned rally outside the British embassy.
The rampage went on for hours, with protesters tearing down the British flag, looting documents and torching at least one vehicle.
They replaced the flag with a banner in the name of Imam Hussein, a seventh-century Shia saint. One looter pulled a picture of Queen Elizabeth from the wall.
Iran’s foreign ministry termed the incident “unacceptable,” though other Iranian officials have praised it. Ali Larijani, the parliament speaker, said the protesters’ “wrath resulted from several decades of domination-seeking behavior of Britain”.
Analysts said the attack highlighted a rift within Iran’s ruling elite over how to deal with increased international pressure.