The United States and Russia remain at odds over whether the United Nations Security Council should move toward imposing penalties on Iran over its nuclear activities, the New York Times reported on Sunday.

US Secretary of State Condoleezza Rice and Russian Foreign Minister Sergey Lavrov spoke on Friday to try to close a crucial difference over the language of a possible Security Council statement on Iran.

The sticking point centers on the passage which says the country's nuclear research is a "threat to international peace and security."

"The Russians are worried that if you label Iran a threat to international peace, it's the beginning of a process. If there is going to be a solution, it will have to be negotiated by Lavrov and Rice," the New York Times quoted an unidentified Western diplomat as saying.

US government officials and European diplomats have emphasized that any future sanctions against Tehran would be structured to avoid strangling the Iranian economy as a whole and stirring anti-western resentment among ordinary Iranians.

The Bush administration's concern is that suffering by Iranians would delay the possibility of a more pro-Western government taking power in Tehran, undercutting a planned US$85-million- program to subsidize Iranian dissidents, promote exchange programs and sponsor broadcasts to encourage pro-Western attitudes.

Despite the desire to win over Iranians, the US and its European partners have prepared a series of escalating economic and political penalties that could be ready for imposition on Iran by the summer, US officials said.

Those penalties, they said, would start with imposing travel bans or freezing foreign-held assets of Iranian officials, followed by a ban on commercial dealings with any businesses connected to Iran's military or to its nuclear programs.

More sweeping bans on commercial, business and energy relations would be saved for later, various officials have said, adding that if the Security Council did not authorize penalties, European countries might act unilaterally after consultation with the United States.

But a ban on military and nuclear energy dealing with Iran would have immediate economic effects on Russia, which has contracted with Iran to develop military defense systems and establish a civilian nuclear reactor on the Persian Gulf coast city of Bushehr.

European diplomats also say that the Russians have raised objections to the American spending plan to encourage political change inside Iran. The plan is widely seen as analogous to efforts to bring about "regime change" in Iraq a few years ago.

(Xinhua News Agency March 27, 2006)