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Brussels: The European Union is preparing sanctions against Iran's biggest bank but wants to see how Tehran responds to a new offer by major powers on its nuclear programme before acting, diplomats said on Friday.
An EU diplomat said the 27-nation bloc was making legal and technical preparations for an asset and funds freeze on state-owned Bank Melli, a measure long sought by the United States to raise pressure on Iran to halt uranium enrichment.
But a source in the EU's Slovenian presidency said Brussels would await an Iranian response to an updated offer of political and economic incentives, due to be delivered to Tehran soon by EU foreign policy chief Javier Solana, before ministers decide to approve the sanctions.
The West suspects Iran of seeking the ability to make nuclear weapons.
The US has indicated it will aggressively impose more sanctions on Iran as long as it refuses to give up sensitive nuclear work and uses the world's financial system for "terrorism," US Secretary of State Condoleezza Rice said on Thursday. She said the Bush administration assessed "practically every day" whether to slap more sanctions on Iran.
"Iran should not be in a position of using the banking system to pass profits made from terrorism or proliferation," said Rice.
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