The text adopted by all five permanent members of the Security Council after several months of negotiations, target Iranian banks and calls for inspection of vessels suspected of transporting goods in connection with Iran's nuclear missiles or programs.
"The draft will be discussed in the UN Security Council has no legitimacy whatsoever," Iran's semi-official Fars news agency quoted President Mahmoud Ahmadinejad's senior advisor Mojtaba Samareh-Hashemi said.
Western diplomats said the text was the result of a compromise between the U.S. and three European allies had pressed for much tougher sanctions against Tehran, and Russia and China which sought to dilute them.
Few of the proposed measures are new. But Western diplomats said that the end result was probably the best they could have hoped for, since China and Russia's decision to avoid measures that could have undermined Iran's troubled economy.
The decision to circulate the resolution to the 15-nation Security Council Tuesday was a rejection of an agreement negotiated by Brazil and Turkey and Iran agreed to submit their enriched uranium abroad in exchange for fuel rods for a medical research reactor.
Iran and the two countries negotiated barter called a halt to talk about additional sanctions. But the United States and its European allies see the agreement as a maneuver by Iran to suspend its efforts to increase pressure on Tehran.
Iranian Foreign Minister Manouchehr Mottaki expressed surprise Wednesday when asked about the resolution.
Asked by a reporter said what Iran's reaction would be, said Mottaki in English: "Are you sure?" Following an assurance that the major powers had agreed on the draft, said Mottaki, "You must not take it seriously." He walked away.
That was not clear whether Mottaki had not seen the draft or if he rejects it. He was attending a meeting in the Tajik capital of Dushanbe for the foreign ministers of the Organization of Islamic Conference Organization.
BRAZIL unhappy DRAFT
Brazil has made it clear that it was unhappy that the United States and its allies seem to ignore the agreement which it has described as a major breakthrough in the protracted nuclear dispute between Iran and West.
"Brazil is not included in any discussion concerning a proposal at this point because we think it is a new position," Ambassador Maria Luiza Viotti Ribeiro told reporters Tuesday. "There was an agreement yesterday that there are very important."
A Turkish diplomat, who spoke on condition of anonymity, does not preclude discussion of the draft, but said "our emphasis is on the second track" - referring to Tehran fuel trade.
But U.S. Ambassador Susan Beatrice said that the agreement had "nothing to do" enrichment of uranium, which led to the threatened sanctions against Iran.
Iran rejects Western allegations that its nuclear program aims to develop weapons. It says its nuclear program ambitions are limited to the peaceful generation of electricity and refuses to halt enrichment of uranium.
The resolution "urges states to implement measures to prohibit the opening of the new Iranian bank branches or offices abroad, where there is reason to believe they can help Iran's nuclear missiles or programs.
It also calls on states "to exercise vigilance of transactions on Iranian banks, including Central Bank of Iran" to ensure that these transactions are not helping Tehran's nuclear missiles and programs.
It encourages countries to be cautious to deal with Iran's Islamic Revolutionary Guard Corps and says some members and the companies it controls will be added to existing lists of individuals and businesses facing asset freezes and travel bans.
The draft, which will be a fourth round of UN sanctions against Tehran, calls for an expansion of an existing arms embargo to include more types of heavy weapons.
The draft will probably be reviewed in the coming weeks.
But Turkey and Brazil, Lebanon Member of the Council has made it clear that it would have problems supporting sanctions against Iran. Lebanon, diplomats said, would probably abstain from a vote on the resolution because the Iranian-backed militant group Hezbollah is the government.
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