A defiant Iran shrugged off the threat of new sanctions Wednesday as Brazil and Turkey urged the United Nations to wait and see how a nuclear swap deal plays out before caving in to US pressure.

But US President Barack Obama warned Turkey's Prime Minister Recept Tayyip Erdogan that Washington would continue to press for sanctions because of "fundamental concerns" about Iran's nuclear program, the White House said.

In the phone call, Obama told Erdogan "Iran's persistent refusal to meet with the P5+1 on Iran's nuclear program and recent refusal to halt enriching uranium to nearly 20 percent, do not build confidence," White House spokesman Robert Gibbs said.

The so-called P5+1 groups the five permanent members of the UN Security Council -- Britain, China, France, Russia and the United States -- plus Germany.

Security Council members Turkey and Brazil earlier urged the world body not to impose new sanctions until Iran had been given time to honour a deal they brokered to swap about half its low enriched uranium (LEU) for nuclear fuel.

"Brazil and Turkey are convinced that it is time to give a chance for negotiations and to avoid measures that are detrimental to a peaceful solution," read a letter signed by their foreign ministers.

The two countries forged a deal Monday they hailed as a step toward ending Iran's years-old standoff with the West, but which US Secretary of State Hillary Clinton framed as an attempt by Tehran to avoid further punishment.

Under the deal, the Islamic republic agreed to ship out much of its stockpile of low enriched uranium to neighbouring Turkey in exchange for fuel for a research reactor for medical isotopes.

"This agreement is a new fact that has to be evaluated," Brazilian Foreign Minister Celso Amorim, who led the Iran-Brazil-Turkey negotiations, insisted in Brasilia.

Iran, which maintains that its nuclear enrichment activities are purely for civilian energy purposes and not aimed at building an atomic weapon as the West fears, suggested that the international desire for new sanctions was wilting.

"(Talk of) imposing sanctions has faded and this resolution is the last effort by the West," the Fars news agency quoted Vice President Ali Akbar Salehi, who also heads Iran's atomic energy organisation, as saying.

But Obama said he was "pleased" by developments after usual standouts Russia and China gave their backing to a tough new draft sanctions resolution circulated Tuesday to the full UN Security Council.

"We agreed on the need for Iran to uphold its international obligations or face increased sanctions and pressure, including UN sanctions," Obama said after talks with visiting Mexican counterpart Felipe Calderon.

"And I'm pleased that we've reached an agreement with our P5 plus-1 partners on a strong resolution that we now have shared with our Security Council partners."

The new draft being considered by the Security Council foresees cargo ship inspections and new banking controls.

It would also expand an arms embargo and measures against Iran's banking sector as well as ban sensitive overseas activities like uranium mining and developing ballistic missiles.

The draft has the blessing of all five veto-wielding permanent members of the Security Council, plus Germany -- a significant boon to the US after months spent trying to persuade Moscow and particularly Beijing to come on board.

China's backing of a fourth round of sanctions against Iran came despite its earlier support for the fuel swap deal.

"We attach importance to and support this agreement," Chinese foreign ministry spokesman Ma Zhaoxu said after Monday's accord was struck.

Given the Brazil-Turkey letter, China's apparent reluctance to comment on new sanctions and Russia speaking only of its "understanding in principle... on the draft resolution," Salehi expressed doubts there was an emerging international consensus against his country.

"We should be patient because they won't prevail and by pursuing the passing of a new resolution they are discrediting themselves in public opinion," he said.

"I think there are some rational people among them who will stop them from making this irrational move."

Iranian Foreign Minister Manouchehr Mottaki expressed similar scepticism about the chances of new sanctions being passed.

"There is no chance the resolution is going to be passed," he told state-run Al-Alam television from the Tajik capital Dushanbe. "The nations who are seeking to impose sanctions are in the minority."

earlier related report
France sees majority backing for Iran sanctions
Paris (AFP) May 20, 2010 - France expects a majority of UN Security Council members to vote for new nuclear sanctions against Iran which would stop Russia selling ground-to-air missiles to the Islamic republic, diplomats said Thursday.

French Foreign Minister Bernard Kouchner said only three of the 15 members of the Security Council were holding out.

Diplomats named the three as Brazil and Turkey, which on Monday signed a uranium enrichment deal with Iran, and Lebanon, whose government includes pro-Iranian politicians.

Turkey and Brazil have called on UN Security Council members to give negotiations with Iran a chance and "avoid measures that are detrimental to a peaceful solution of this matter."

"I think that the text will be approved. I can't be certain, nobody can be certain," Kouchner told a small group of reporters.

If none of the council's five permanent members veto the text then a majority of the 15-strong committee is all that is needed for the fourth round of sanctions on Iran, which the West accuses of seeking nuclear weapons.

The UN resolution would expand an existing arms embargo, measures against Iran's banking sector and ban it from mining uranium and developing ballistic missiles overseas, according to a US official in New York.

Russia is one of the veto-wielding permanent members and western diplomats said the sanctions would include stopping sales of Russian S-300 surface-to-air missiles to Iran.

The United States and Israel worry the missile systems could be used to protect against possible future air strikes against Iran's nuclear sites.

The missile sale has already been agreed but Russia's state arms exporter said it would comply with any UN order.

"Any sanctions introduced by the UN are obligatory for arms exporting countries," Rosoboronexport spokesman Vyacheslav Davidenko told AFP. "Russia is no exception. Russia always complies with the sanctions."

But Iran's first nuclear plant, which Russia is building in Bushehr, should go online by August regardless of any new sanctions, a top Russian atomic official said.

"We are counting on the nuclear power station launching in August, if everything goes as planned," Sergei Kiriyenko, head of Russia's federal atomic energy agency, was quoted as saying by Russian news agencies.

"The resolution now being prepared on Iran will not in any way affect this."

Russia, which has long enjoyed close ties with Iran, has backed the US-proposed draft resolution, exasperated by Iran's intransigence and despite a surprise nuclear deal agreed between Iran, Brazil and Turkey this week.

The five permanent members of the UN Security Council -- Britain, China, France, Russia and the United States - are discussing appendices to the sanctions text that will go before the full body, diplomats said.

According to a copy of the draft, seen by AFP, the sanctions would ban the sale of tanks, armoured fighting vehicles, large calibre artillery, war planes, attack helicopters, warships, missiles and missile defence systems to Iran.