British draft proposes new UN sanctions on Iran

By Carol Giacomo, Diplomatic Correspondent

WASHINGTON (Reuters) - Iran's airlines and ships could be denied landing and transit rights and two more of its banks could have their assets frozen under informal proposals by Britain for a new U.N. sanctions resolution.

The confidential draft, obtained by Reuters on Friday, is aimed at ratcheting up pressure on Iran for defying U.N. Security Council demands to halt uranium enrichment, which yields both fuel for power plants and weapons.

Iran says its goal is the peaceful generation of electricity. The West fears the enrichment is aimed at producing a nuclear weapon.

U.S. and European officials insisted the proposals under discussion were not intended to affect the oil markets, where Iran is a major producer and exporter.

Britain has also suggested banning new arms contracts with Iran, international travel for senior Iranian security officials and continued Russian work on Iran's nuclear power reactor at Bushehr, according to the June 14 draft.

Britain, the United States and other major powers have begun preliminary discussions about a third U.N. resolution tightening sanctions on Iran but formal negotiations are awaiting the conclusion of talks on Saturday between Iran and the European Union foreign policy chief, Javier Solana.

Initial proposals almost always reflect tough positions that are often rewritten in the Security Council negotiating process.

One British proposal would have states "deny permission to take off from, land in or overfly their territories, or berth in or secure passage through their territorial waters, of all aircraft or vessels owned or controlled by Iranian airlines or shipping companies."