Brussels/Tehran: EU nations agreed on Thursday to examine sanctions on Iran`s energy sector over its nuclear program which could include an oil embargo, championed by France and Britain.
China, the biggest buyer of Iranian crude, stepped in to warn against "emotionally charged actions" that might aggravate the row over the storming of Britain`s embassy in Tehran.
A senior US Treasury official said Washington was committed to taking steps to freeze the assets of the Iranian central bank and to working with US allies to do the same.
In Iran, diplomats said protesters had devastated parts of the British embassy complex in Tehran. A commander in an Iranian militia which joined Tuesday`s ransacking said he was tired of decades of British "plotting" against Iran.
EU foreign ministers meeting in Brussels said Iran`s energy, financial and transport sectors might be targeted in response to a report from the UN nuclear watchdog which suggested Iran has worked on designing an atom bomb.
They added 180 Iranian people and entities to a blacklist that imposes asset freezes and travel bans on those involved in the nuclear work, which Tehran says is for peaceful purposes. But they appeared to postpone decisions on a ban on oil imports.
"The Council (of ministers) agreed to broaden existing sanctions by examining, in close coordination with international partners, additional measures including measures aimed at severely affecting the Iranian financial system, in the transport sector, in the energy sector," they said.
Ministers said a decision would be taken no later than their next meeting in January. EU member states take 450,000 barrels per day of Iranian oil, about 18 percent of the Islamic Republic`s exports, much of which go to China and India.
European Energy Commissioner Guenther Oettinger said all 27 EU states would need to back any embargo. "We need a common position of all European Union member states," he told a news agency.
French President Nicolas Sarkozy proposed the embargo and won backing from Britain, but resistance persists. An import ban might raise global oil prices during hard economic times and debt-strapped Greece has been relying on Iranian oil, which comes with an attractive financing offer.
French Foreign Minister Alain Juppe said the European Union could aim to offset any crude oil shortfall if a ban were imposed.
In Washington, Treasury Under Secretary David Cohen said officials were "committed to taking action against the CBI (Central Bank of Iran) to freeze its assets, to work with our allies to have them take a similar action, and to work with our allies to encourage them to take the steps that they have already indicated a willingness to consider, which is to ramp down their involvement with the CBI and their purchases of Iranian oil".
Italy said on Thursday it was recalling its ambassador from Tehran for consultations and considering closing its embassy, the latest of several European countries to make similar moves.
Britain has shut down Iran`s embassy in London after pulling out its own diplomats from Tehran. It said the storming could not have taken place without the consent of Iranian authorities.
"I stress that the measures I hope we will agree today are related to the Iranian nuclear program. These are not measures in reaction to what has happened to our embassy," Foreign Secretary William Hague told BBC radio.
Brigadier General Mohammad Reza Naqdi of the Basij militia, which participated along with hardline students in the embassy incident, said Iranians "were tired of decades of London`s plots against Tehran", the official IRNA news agency reported.
EU diplomats who visited the embassy told Reuters of severe damage. "I saw two rooms where you couldn`t see what they were. There was just ashes ... It was devastating to see," one said.
"You could tell the action was coordinated," he added. A building that had not been used for years was untouched while the most important offices were gutted.
China urges restraint
Beijing issued an appeal for cool heads. "China hopes that the relevant parties can remain rational, calm and restrained, to avoid emotionally charged actions that could intensify the dispute," Foreign Ministry spokesman Hong Lei said in Beijing.
Russia said the tension undermined the chances Iran would cooperate with efforts to ensure it does not build nuclear arms.
"We speak out categorically against cranking up a spiral of tension and confrontation on issues linked with Iran. We believe that this ... is fraught with severe consequences," Foreign Ministry spokesman Alexander Lukashevich told a news briefing.
Russia and China have approved four rounds of UN Security Council sanctions against Iran over its nuclear program, after working together to blunt tougher Western proposals.
The UN nuclear watchdog said last month Iran appeared to have conducted research and experiments relevant to developing an atom bomb and may still be doing so.
The nuclear program has raised the question of whether Israel might take military action against arch-foe Iran.
In Jerusalem, Defense Minister Ehud Barak said an Israeli attack was not imminent but all options remained open to stop what Israel sees as an Iranian bid to develop nuclear weapons.
"We have no intention, at the moment, of taking action, but the State of Israel is far from being paralyzed by fear," Barak told Israel Radio. "It must act calmly and quietly -- we don`t need big wars.