Iran dismissed the latest raft of sanctions, saying such steps would only intensify Iranian popular support for a nuclear program it insists is solely for peaceful purposes.

But analysts said Iran's leadership may have underestimated Western resolve and over-played its familiar hardline brand of brinkmanship, making it hard for them to reach a compromise.

The ratcheting up of pressure on Iran follows a November 8 report by the International Atomic Energy Agency which presented intelligence suggesting Iran had worked on designing an atomic bomb and may still be secretly carrying out related research.

Once the EU decision is formally approved by foreign ministers on December 1, European companies will be banned from doing business with the listed firms and organizations, while individuals will be subject to asset freezes and visa bans.

The EU move follows a coordinated tightening of the sanctions by the United States, Britain and Canada on November 21.

However, Russia immediately opposed new sanctions, describing such move as unacceptable and contradictory to international law.

Such practices ... seriously complicate efforts for constructive dialogue with Tehran," Foreign Ministry spokesman Alexander Lukashevich said in the statement