The New York Times

By STEVEN LEE MYERS
Published: June 17, 2008

LONDON — Prime Minister Gordon Brown announced Monday that Britain and the European Union would freeze the overseas assets of Iran’s largest commercial bank, joining the United States in intensifying financial pressure against Iran over its refusal to address international concern over its nuclear activities.

Mr. Brown, appearing with President Bush after discussions here, also pledged to send additional troops to Afghanistan, and indicated that he would not bend to political pressure at home to withdraw British forces in southern Iraq more quickly.

Both leaders said that they remained open to resolving the dispute with Iran diplomatically, but only after it suspended uranium enrichment, which Mr. Bush and others have said is aimed at developing nuclear weapons. Iran’s leaders insist the nuclear program is for peaceful purposes.

Iran gave a chilly reception to a proposal from Western powers that was delivered Saturday. The proposal offered economic and diplomatic incentives to Iran to suspend its enrichment and to begin talks to resolve questions about its nuclear work. While Iran has not formally responded, President Bush said Saturday that it had rejected the offer.

Mr. Brown announced that Europe would move to restrict European transactions of the Iranian bank, Bank Melli, immediately. Last week, the Iranian news media reported that Iran had recently moved $75 billion in assets from Western financial institutions to banks in Iran and Asia.

Mr. Brown also said that if Iran continued to defy existing United Nations resolutions calling for it to halt uranium enrichment, European leaders would begin considering sanctions on investments in Iran’s oil and natural gas industries. That would be a far more significant penalty, though one that causes unease because of already soaring global energy prices.

“We await the Iranian response and we’ll do everything possible to maintain the dialogue,” Mr. Brown said at a news conference with Mr. Bush at the Foreign and Commonwealth Office. “But we are also clear that if Iran continues to ignore united resolutions, to ignore our offers of partnership, we have no choice but to intensify sanctions.”

Iran did not immediately respond to Mr. Brown’s announcement, but economists in Tehran said that sanctions could put further strain on Iran, especially at a time when Iran is highly dependent on imports, from Europe in particular, forcing it to look elsewhere for trade.

“The sanctions will put on further pressure, but Iran can use its windfall oil revenue and pay further costs to import through smaller banks,” said Saeed Leylaz, an Iranian economist. “Iran will also shift its trade from Europe to Asia.”

New sanctions would be the latest move to gradually increase punitive measures against Iran, while offering an option to ease them if its government retreated from its enrichment program.

The United States, which severed diplomatic relations and most economic ties with Iran after the Islamic Revolution in 1979, has long sought to interfere with Iran’s foreign financial transactions. The Bush administration imposed largely symbolic sanctions against Bank Melli, which handles most of Iran’s overseas trade, and other banks last fall.

“If we freeze the assets of Bank Melli, they start to run out of places they can do business in Europe,” the senior British official said. “That starts to apply real pressure.”

Mr. Brown’s strong support for Mr. Bush on Iran, Afghanistan and Iraq came as Mr. Bush was ending a weeklong visit to Europe that featured confrontations over a variety of issues, but produced what administration officials described as progress in several areas.

Mr. Brown’s announcement of sending additional troops to Afghanistan was intended to bolster the NATO mission there, at a time when the alliance has been accused of responding slowly to re-emerging threats from the Taliban and other militants and tying its own hands with individual limits on certain operations.

Frustrated American defense officials have urged the NATO allies to contribute more forces and let those already there operate more aggressively.

Britain has 7,800 troops in Afghanistan. That is second only to the United States, which has 34,000, some of those within the NATO-led operation. The NATO force has more than 50,000 troops in all.

The British defense minister, Desmond Browne, later confirmed to Parliament that an additional 230 troops, including engineers, trainers and other specialists in reconnaissance, would be sent to Afghanistan. That would bring the British total by next spring to more than 8,000, most of them in southern Afghanistan.

An official traveling with Mr. Bush said that while the increase might seem small, the new troops would not operate with the constraints that other nations have imposed on their forces serving there.

The announcement came as the bodies of five British soldiers killed in two attacks in Afghanistan last week returned home. A total of 102 British soldiers have died in Afghanistan since 2001.

In the final stop on his European tour, President Bush met Monday in Belfast with leaders of Northern Ireland, implying that peacemaking efforts there would be a model for other deep-seated conflicts around the world, including Iraq.

Flanked by First Minister Peter Robinson, the new leader of the main Protestant party, the Democratic Unionists, and Deputy First Minister Martin McGuinness of Sinn Fein, the Catholic party allied to the Irish Republican Army, the president told journalists about his confidence that the Northern Ireland peace agreement, after decades of conflict, would endure.

“Obviously more work has to be done,” he said of the power-sharing agreement reached in March of last year, which took effect two months later But, he added, “progress made to date would have been unimaginable 10 years ago.”

Mr. Bush has already visited Slovenia, Germany, Italy, the Vatican and France, a trip he described as a farewell tour a week ago. But as the week went on, Mr. Bush and his aides appeared annoyed with tributes that tended to highlight the end of his presidency.

“You kind of wrote my political obituary,” Mr. Bush told President Nicolas Sarkozy of France, after a glowingly nostalgic toast.

Reporting was contributed by Alan Cowell from Paris, Nazila Fathi from Tehran, Stephen Castle from Luxembourg and Eamon Quinn from Belfast, Northern Ireland.

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