A text of the proposed resolution was distributed to the 15 council nations on Friday, and US ambassador John Bolton told reporters at the UN headquarters that a vote could be held early next week.

If Iran continues to pursue uranium enrichment, "the next step will be the consideration of sanctions in the Security Council, and it would be our intention to move forcefully to get those sanctions adopted," Bolton said.

The first stage would be political and economic sanctions, diplomats stressed.

The United States and its allies believe that Iran is seeking to build a nuclear bomb. Iran has insisted its programme is peaceful but has refused to comply with International Atomic Energy Agency (IAEA) orders to suspend uranium enrichment and other activities.

Britain, China, France, Russia and the United States -- the five permanent members of the Security Council -- and Germany drew up the draft resolution during weeks of painstaking talks.

Russia and China have led opposition to any talk of sanctions in the resolution.

Russia's ambassador, Vitaly Churkin, stressed that the new resolution would not threaten sanctions and that it was "an invitation to dialogue" with Iran.

But he also acknowledged that if Iran did not respond, the Security Council would then consider "measures of pressure, like sanctions" under Article 41 of Chapter Seven of the UN Charter. Article 41 would not allow the use of force.

Churkin insisted sanctions would be "the next step, a possibility along with other possibilities."

The draft resolution calls on Iran to follow IAEA directives "without further delay" and highlights the three years the IAEA has spent trying to get information about Iran's nuclear programme.

If passed, it would call on the IAEA director Mohammed ElBaradei to give a report on whether Iran has complied by August 31.

While warning of further measures, the resolution "underlines that further decisions will be required should such additional measures be necessary," meaning that a new resolution would have to be passed to get sanctions.

Diplomats said the resolution would increase pressure on Iran to respond to an offer of economic and political incentives to halt its nuclear production that was made by Britain, France and Germany in June.

Iran has said it will not reply before August 22, nine days before the proposed UN deadline.

Bolton said the resolution would be "a mandatory command" to comply with IAEA resolutions and set out a tough line on the issue.

"The draft text will impose a mandatory and binding requirement on Iran that it suspend all uranium enrichment and reprocessing activities," said Bolton.

"I think the resolution will put the ball back in Iran's court," he said.

"They can take one path and suspend their uranium enrichment activities and come into discussions on the very generous offer," made by the European Union trio, or "they will face increased international isolation, economic and political pressure," said Bolton.

The vote is virtually certain to be passed without difficulty, as all five permanent members support it, lifting any threat of a veto.

The accord on a draft resolution was sealed despite China hinting it could hold up other key UN business after the United States refused to accept criticism of Israel in a Security Council statement this week on the killing of four UN peacekeepers in Lebanon.

Bolton said he had not seen any sign of Chinese objections to the text.

Russia is believed to have greater influence over Iran among the UN's major powers.

Russia's President Vladimir Putin spoke about the nuclear dispute with Iran's hardline president Mahmud Ahmadinejad in telephone talks on Tuesday, the Kremlin said.

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