US renews Iran sanctions

President Bush responded warily to Russia's decision

The United States has renewed a ban on trade and investment with Iran and is warning Russia that possible arms sales to that country could have "serious ramifications" for US-Russian ties.

The actions and policies of the government of Iran continue to threaten the national security, foreign policy, and economy of the United States

George W Bush

President Putin of Russia said that Moscow would continue to sell arms to Iran following talks in Moscow with Iranian President Mohammed Khatami.

The US administration responded warily on Tuesday to Russia's decision, saying US officials did not know which weapons or technology was involved.

US Secretary of State Colin Powell and national security adviser Condoleezza Rice will get a chance to question Sergei Ivanov, the Russian security chief, when he visits Washington on Wednesday.

Sanctions

President George W Bush said in the order renewing sanctions that he was taking the step "because the actions and policies of the government of Iran continue to threaten the national security, foreign policy, and economy of the United States".

Colin Powell will meet Sergei Ivanov on Wednesday

The sanctions were imposed by former President Bill Clinton in 1995 and were set to expire on Thursday.

But White House National Security Council spokeswoman Mary Ellen Countryman said Mr Bush retained the ability to modify or end them.

The sanctions, imposed under the International Emergency Economic Powers Act, mainly affect US petroleum companies, barring them from investing in Iran's energy sector.

There are certain things which quite clearly would cause serious concern to the US and serious ramifications

State Department spokesman Richard Boucher

The US accuses Iran of sponsoring terrorism, seeking to sabotage Arab-Israeli peace efforts, and commiting human rights abuses.

Iran has urged the US to lift its sanctions, saying it would buy US exports if US markets were opened to Iranian goods.

In Moscow, the chief foreign affairs official at the Russian Defence Ministry Col-Gen Leonid Ivashov, said on Monday that the scope of Russia's arms accord with Iran is a private matter between two sovereign states.

'Defensive weapons'

President Putin said that Iran had asked for defensive weapons only, and had the right to defend itself.

The State Department spokesman, Richard Boucher said Washington was still not clear about what type of "defensive weapons" Mr Putin was referring to.

Mr Putin held talks with the Iranian president in Moscow

But he said that any Russian sale to Iran of advanced conventional weapons, missiles or missile technology would draw a strong US response.

"The first important thing is to find out what they mean by 'defensive' weapons, what they intend to sell, and whether they have any contracts" he pointed out.

Iran state radio said the US administration would "gain nothing" but a "deepening of the chasm" between Tehran and Washington, who have had frosty relations since Iran's 1979 revolution.

Russia sold some $5bn in weapons to Iran from 1985 to 1995 but stopped when then President Boris Yeltsin agreed with the Clinton administration to end the relationship.