Iran may face harsher U.N. sanctions in June-US

BERLIN, May 9 (Reuters) Iran will face further sanctions in June if it continues to defy UN demands that it stop uranium enrichment work the West believes is at the centre of a secret atom-bomb plan, a senior US official said today.

However, US Under Secretary of State Nicholas Burns reiterated that sanctions would be suspended if Iran halted enrichment and returned to the negotiating table.

''If Iran doesn't say yes to negotiations ... they're going to find a third Security Council (sanctions) resolution in the month of June,'' Burns told reporters at the US embassy.

Iran has repeatedly stated it would not give up its nuclear fuel programme which it says is aimed only at producing electricity. The West suspects Tehran wants to build bombs.

The United Nations has imposed two sets of sanctions after Iran rejected resolutions ordering it to freeze nuclear work.

Burns did not give a deadline for Iran to suspend enrichment but said if Tehran had not moved by the Group of Eight (G8) summit on June 6-8, it would be time to increase sanctions.

The United States, Britain, France and Germany have made a full suspension of enrichment work a condition for beginning negotiations. Iran says it wants to negotiate but not if it has to freeze enrichment.

''We have agreed that we will suspend our sanctions in the Security Council for the life of any negotiations,'' Burns said, a statement in line with a UN resolution passed in March.

Burns is in Berlin for meetings with political directors from the G8 nations to prepare for the summit in Heiligendamm, Germany, and meetings on Iran with Germany and the other four permanent UN Security Council members -- Britain, France, Russia and China.

US officials said the six world powers were originally planning to meet today to discuss Iran. They will now meet early tomorrow. Among the discussion topics is the possible language for a sanctions resolution, diplomats said.

China would participate via telephone, Burns said.

Among possible sanctions was an increase in the number of Iranian banks to be blacklisted by the United Nations, several diplomats said.

G8 SUPPORTS MORE SANCTIONS However, German Foreign Ministry spokesman Martin Jaeger said sanctions would not be on the agenda. The powers intended to prepare for the next meeting between EU foreign policy chief Javier Solana and Iranian nuclear negotiator Ali Larijani.

Solana met Larijani recently and said the meeting was very difficult as Iran had said it had no intention of suspending uranium enrichment.

One diplomat from a G8 country said the draft of a statement on nuclear non-proliferation to be approved at the summit called for increasing pressure on Iran if it stays defiant.

Under the draft, the G8 would ''support adopting further measures should Iran refuse to comply with its obligations'', said the diplomat, declining to be named.

Germany is the G8 president. Other members are the United States, Russia, Britain, France, Italy, Canada and Japan.

Several diplomats said the major powers were satisfied with the impact sanctions were having and that Iranians were growing increasingly worried about the economic pressures.

But Iranian Deputy Foreign Minister Abbas Araghchi dismissed on Wednesday suggestions sanctions were having an impact.

Reuters JK SBA VP0216