EU to introduce harshest sanctions against Iran

European Union governments plan to ratchet up sanctions pressure against Iran over its nuclear program on Monday, approving new measures against Tehran's banking sector, industry and shipping, Jerusalem Post reported .

The new sanctions mark one of the toughest pushes against Iran by Europe to date, and come amid mounting concerns over the Islamic Republic's military intentions and the failure of diplomacy to solve the atom stand-off this year.

But governments in Europe and the United States have refused to do so and, instead, are tightening the financial screws against Tehran as fears grow that the nuclear dispute could envelop the Middle East in a new war.

"In the last couple of months Iran has not budged on any of the key issues and we must therefore increase the pressure through sanctions," German Foreign Minister Guido Westerwelle said in Berlin.

Speaking a day before his counterparts meet in Luxembourg to approve new sanctions, he said diplomacy was still an option.

"Our offer to Iran still stands: substantial negotiations with the clear aim of preventing Iran from arming itself with nuclear weapons. It is time for a political solution." Iran's nuclear interlocutors -- Germany, France, Britain, United States, China and Russia - asked Tehran this year to abandon the enrichment of uranium to 20 percent, a crucial technological step on route to producing an atom bomb.

Tehran's refusal has lead Israel, widely understood to be the only nuclear power in the Middle East, to threaten to bomb its nuclear installations.