PARIS Britain and France are leading a push for new EU sanctions to punish Iran over its nuclear program. But while European nations increasingly fear a war in their back yard, the continent is divided over how to deal with the crisis.
The United States raised the stakes last week with new sanctions targeting the Iranian Revolutionary Guards, which Washington accuses of supporting terrorism by backing Shiite militants in Iraq. The announcement raised the question of whether the European Union would follow suit.
France, long viewed as too busy making money in Iran to punish it over its nuclear program, is now seeking to hurt Tehran economically. Britain also sees tougher sanctions as essential.
But few other European nations are clamoring to support stepped-up EU sanctions. The divisions mirror those that split the continent over Iraq, though the fault lines have shifted.
"It's not unthinkable that (Europe) could reach symbolic sanctions, but it will be complicated to get much further. There's just too much division," said Philippe Moreau-Defarges of the French Institute for International Relations. "France is pretty isolated, aside from Britain."
Since the United States first slapped sanctions on Iran in 1979, European companies have continued to rake in profits from business in Iran, from the oil sector to banking deals.
While corporate rivals in Asia or elsewhere could fill a void left by the possible loss of European companies in Iran, EU expertise in the financial or industrial sectors would be missed, analysts said. Iran already faces limited EU sanctions and visa bans.
Concerns have been rising in some European corners that the United States or Israel might attack to prevent Iran from developing atomic bombs. But few EU members agree on what measures to take to make sure war does not break out.
Iran insists its nuclear program is designed strictly to produce electricity and has repeatedly defied U.N. demands that it suspend uranium enrichment a possible pathway to atomic weapons.
EU foreign ministers in mid-October failed to agree on new sanctions sought by French Foreign Minister Bernard Kouchner. He sent a letter to European counterparts Oct. 2 urging them to examine new EU sanctions, mainly on Iran's financial sector, to complement efforts toward a third set of U.N. Security Council sanctions.
But Germany and Italy Iran's biggest EU trading partner want to give diplomacy and current sanctions more time, looking for unity through the United Nations.
"These are countries that are discreet in their international relations and have economic ties to Iran," in industries like metals, chemicals and oil, said Francois Gere, an Iran specialist and head of the French Institute of Strategic Analysis.
After meeting Wednesday with Iranian officials, Italian Premier Romano Prodi praised the efforts of EU and Iranian negotiators and said dialogue was "the only instrument" to reach a solution.
The new dynamic of European ties with the United States is central to the equation.
French President Nicolas Sarkozy has sought to rekindle ties with the U.S. that soured during the Iraq war. Britain has been a stalwart U.S. friend. Several EU newcomers from eastern Europe tend to favor tougher sanctions, mostly because of their pro-U.S. affinities, analysts said.
Sarkozy said in August he wanted to avoid "a catastrophic alternative: an Iranian bomb, or the bombing of Iran" if diplomacy fails. The mere suggestion from France of military action against Iran sent shockwaves through diplomatic circles. But Sarkozy's comments appear designed to rally the international community around the idea of a forceful strategy on Iran that stops short of war.
Sarkozy also apparently wants to set the example that France is willing to take a hard line against Iran despite its economic interests there. French lenders hold more outstanding Iranian debt of any in Europe some $5.9 billion or more than a quarter of all foreign claims there, according to Bank for International Settlements figures provided in September.
French automaker Renault has invested millions in a partnership to develop a local equivalent of its Logan sedan. A Renault spokeswoman said that existing sanctions on Iran have stalled the rollout of the production line that could make up to 300,000 cars per year for the Iranian market.
Some analysts, however, say France's tough stance is just for show.
"Though their rhetoric has been very staunch, in practice what they're going to do is a totally different thing," said Roger Howard, author of "Iran Oil," a book on Mideast oil and the United States.
French oil company Total SA is close to finalizing a deal to develop the latest phase of Iran's South Pars natural gas field, Howard said. Total has declined to comment about possible sanctions.
"If Sarkozy and Kouchner are that hawkish, they can put pressure on them to pull the deal or distance themselves from it," he said.