The United Nations Security Council is trying to reach agreement on the next stage of sanctions to be imposed on Iran over its nuclear programme.
Iranian dissidents protested at the UN against Iran's policies
The council's five permanent members are pushing for consensus on a draft resolution but have so far failed to persuade some other members.
They want to augment existing sanctions with a ban on arms exports from Iran and further financial restrictions.
Iran's supreme leader warned it would not stop its nuclear activities.
The country is still enriching uranium in defiance of previous Security Council resolutions.
Ayatollah Ali Khamenei said Iran was determined to pursue its programme, regardless of international action.
"Until today, what we have done is in accordance with international regulations," he was quoted by the Associated Press news agency as saying.
"But if they take illegal actions, we too can take illegal actions and will do so."
Ayatollah Khamenei sounded a defiant note
He did not specify what he meant.
Iran denies Western claims that it is seeking to produce nuclear weapons, saying its atomic programme is purely for peaceful energy production.
The five permanent members of the Security Council - Britain, France, Russia, China, and the United States - would like their resolution to be agreed unanimously, to send a more powerful signal to Iran, says the BBC's UN correspondent, Laura Trevelyan.
But if consensus is not imminent Britain, France and the US may force a vote.
Council members South Africa, Qatar and Indonesia have proposed amendments.
South Africa's - that Iran be granted a 90-day hiatus on all sanctions - has been rejected out of hand by the council's major powers.
Britain's UN ambassador, Emyr Jones Parry, called the suggestion "perverse".
"Every time we paused, Iran then came round and said the pause was terribly useful because 'we were able to develop and enhance our nuclear capability'," he said.
But they say they will consider on Thursday a request by the two Muslim nations for the resolution to call for a nuclear-free Middle East - implying that Israel should get rid of its nuclear weapons.
Ban on loans
Iran's President Mahmoud Ahmadinejad has been granted a visa by the US government so he can address the Security Council before any vote, but it is not clear whether that might take place this week or next.
Last December, the Security Council voted unanimously to impose a first, limited set of sanctions against Iran for refusing to halt uranium enrichment.
The latest package includes an arms export ban, travel restrictions on people involved in Iran's nuclear programme, freezing the assets of key individuals and companies, and a ban on new loans to Iran.
The draft gives Iran 60 days to comply with UN demands or face "further appropriate measures".