LONDON Prime Minister Gordon Brown announced on Monday that Britain and the European Union would freeze the overseas assets of Iran's largest commercial bank, joining the United States in intensifying financial pressure against Iran over its refusal to address international concern over its nuclear activities.
Brown, appearing with President Bush after discussions here, also pledged to send additional troops to Afghanistan and indicated that he would not bend to political pressure at home to withdraw British forces in southern Iraq more quickly.
Both leaders said that they remained open to resolving the dispute with Iran diplomatically but only after it suspended uranium enrichment, which Bush and others have said is aimed at developing nuclear weapons. Iran's leaders insist the nuclear program is for peaceful purposes.
Iran gave a chilly reception to a proposal from Western powers that was delivered Saturday.
Brown announced that Europe would move to restrict European transactions of the Iranian bank, Bank Melli, immediately. Last week, the Iranian news media reported that Iran had recently moved $75 billion in assets from Western financial institutions to banks in Iran and Asia.
Brown also said that if Iran continued to defy existing U.N. resolutions calling for it to halt uranium enrichment, European leaders would begin considering sanctions on investments in Iran's oil and natural gas industries.
"We await the Iranian response and we'll do everything possible to maintain the dialogue," Brown said at a news conference with Bush at the Foreign and Commonwealth Office. "But we are also clear that if Iran continues to ignore united resolutions, to ignore our offers of partnership, we have no choice but to intensify sanctions."
Iran did not immediately respond to Brown's announcement, but economists in Tehran said that sanctions could put further strain on Iran, especially at a time when Iran is highly dependent on imports, from Europe in particular, forcing it to look elsewhere for trade.
"The sanctions will put on further pressure, but Iran can use its windfall oil revenue and pay further costs to import through smaller banks," said Saeed Leylaz, an Iranian economist. "Iran will also shift its trade from Europe to Asia."
New sanctions would be the latest move to gradually increase punitive measures against Iran, while offering an option to ease them if its government retreated from its enrichment program.
Brown's announcement of sending additional troops to Afghanistan was intended to bolster the NATO mission there, at a time when the alliance has been accused of responding slowly to re-emerging threats from the Taliban and other militants and tying its own hands with individual limits on certain operations.