Associated Press
Iran's navy chief Adm. Habibollah Sayyari briefs media on a naval exercise, in a press conference in Tehran, Iran, Thursday, Dec. 22, 2011.

DUBAI, United Arab Emirates — Iran closed out naval war games in the Gulf on Tuesday much the way they began last month: striking a tone of military defiance while Western powers rallied behind tougher oil and financial sanctions as a crippling tool against Tehran's nuclear program.

The standoff atmosphere — less than a week after Iran warned it could block one of the world's key oil tanker sea lanes in response to economic pressures — appeared to deepen further with an Iranian general suggesting a U.S. aircraft carrier is not welcome to return to the Gulf.

In Paris, meanwhile, France's foreign minister said there is "no doubt" that Iran is moving toward a nuclear weapon and urged Europe to match America's tighter sanctions set in motion last week. Alain Juppe said the measures could include targeting Iran's Central Bank and imposing an Iranian oil embargo.

A Western snub of one of OPEC's heavyweight exporters would still leave Iran with many oil-hungry markets such as China and India — and give Tehran crucial economic lifelines to resist the U.S. and its allies. But worries that Gulf tensions could disrupt supplies sent oil above $101 a barrel and piled more pressure on Iran's currency, the rial, which hit record lows against the dollar earlier this week.

"It's clear the economy is in dire straits and the sanctions are having an impact no matter what Iranian officials say," said Salman Shaikh, director of The Brookings Doha Center in Qatar. "Hitting the oil sectors may push the economy down even further, but that doesn't mean Iran will bend to the West."

Iran has proposed restarting international talks on its nuclear program, which Tehran insists is only for peaceful energy and research purposes. The offer to reopen dialogue is widely interpreted as a sign that Western sanctions are taking a serious bite. But the outreach could also include preconditions such as easing the economic pressures, which would likely meet strong resistance in Washington.