Tehran (AsiaNews) – The deadline set by the United Nations Security Council for Tehran to suspend its nuclear programme is set to expire today; otherwise sanctions might be imposed. The next step is for the International Atomic Energy Agency (IAEA) to report on whether Tehran has complied with Security Council deadline.

In recent days Iran's leaders have insisted their country would continue to enrich uranium.  Uranium enrichment is necessary to process fuel for nuclear reactors but may also produce nuclear material for atomic bombs.

"Production of nuclear fuel is one of Iran's strategic objectives," Iran's chief nuclear negotiator Ali Larijani said. "Any action to limit or deprive Iran [of this right] could not force Iran to give up this goal."

On Saturday Mr Ahmadinejad inaugurated a new phase of a heavy water reactor project in Arak. Heavy water reactors produce plutonium which can be an alternative route to a nuclear device, the other being highly enriched uranium.

In making that move, the Iranian president was signalling his country's unwillingness to abandon its nuclear programme.

A meeting of the '5+1' group (China, France, Great Britain, Russia, United States, plus Germany) is scheduled for early September to find a response.

All six had proposed to Iran a package of economic and technology-related incentives in exchange for freezing its nuclear programme, but Tehran first refused and then, following the UN ultimatum, said it was open to a dialogue.

Discussions about possible sanctions will start over the next few days despite Russia's and China's opposition and their preference for dialogue.

Diplomatic sources are saying that sanctions might initially target Iran's nuclear programme, such as an embargo on nuclear equipment and a travel ban on Iranian nuclear officials. If Iran continues to refuse to halt enrichment, sanctions would be expanded to a travel ban on Iranian government officials and freezing their assets abroad, an embargo on weapons and dual-use nuclear items, and restrictions on commercial flights.

In an attempt to split the international community Ahmadinejad in a meeting with former Spanish Prime Minister Felipe Gonzalez said that Europe should take a different position from that of the United States, which is well known for being in favour of sanctions.

"Sanctions," said the Iranian president, "cannot dissuade Iranians from their decision to make progress . . . . it would be better for the European countries to make decisions independently and settle the issue through negotiations."

Despite Iranian leaders' defiant mood, many observers believe that sanctions would hit Iran's already vulnerable economy hard. Unemployment is running at more than 10 per cent of the workforce, especially in the youth population, but many economists believe the real figure to be higher.