The European Union on Thursday agreed to sanction more than 100 Iranian companies, sharply expanding the number of firms hit by an assets freeze over Iran's disputed nuclear programme.

Diplomats said the "significant expansion" in EU sanctions was expected to be approved and announced Monday by the bloc's 27 foreign ministers.

Among the firms blacklisted are the European-Iranian Trade Bank (EIH), a German-based Iranian-owned bank believed to be involved in the Islamic republic's secret nuclear weapons' programme.

An official in Berlin told AFP this week that "evidence pointing to the EIH's involvement in (nuclear) proliferation has multiplied and become tangible."

Five individuals are also targeted by a travel ban and assets freeze, diplomats said.

"Many of the firms are fronts" set up in Europe and "the individuals targeted are essentially their managers", said an EU diplomat who asked not to be named.

"The idea is to increase the pressure on Iran and to prevent the circumventing of existing sanctions," said another diplomat.

In June last year, the UN Security Council slapped a fourth set of sanctions against Iran for refusing to halt its uranium enrichment work, the most sensitive part of Tehran's atomic drive.

The UN sanctions authorise states to conduct high-seas inspections of vessels suspected of ferrying banned items to Iran and added 40 entities to a list of people and groups subject to travel restrictions and financial sanctions.

In Washington this week, EU foreign affairs chief Catherine Ashton and US Secretary of State Hillary Clinton said the burden remains on Iran to show it is serious about tackling international concerns over its nuclear ambitions.

The United States, Russia, China, France, Britain and Germany have engaged in on-and-off talks with Iran aimed at halting its uranium enrichment program, amid concerns it masks a drive to produce a nuclear weapon.

Iran, which insists its programme is peaceful and denies the charges, said earlier this month this it is ready for new talks after a meeting in Istanbul ended without progress in January, adding the ball is in the court of the six.

But Ashton, who coordinates the talks on behalf of world powers, was sceptical of a new round any time soon.

"I would like to say there will be a new round of talks. From the letter that I've received, I don't see that at the present time."

Citing unnamed Western officials, the Wall Street Journal last year said the EIH bank had done more than a billion dollars of business on behalf of firms subject to US, UN and EU sanctions.

EIH's business partners are said to include units of Iran's Defense Industries Organization, the Aerospace Industries Organization and the Iranian Revolutionary Guard Corps.