The European Union and Canada hit Iran with tough sanctions against its vital oil and gas industry Monday, cranking up pressure on Tehran to resume talks on its controversial nuclear activities.

European foreign ministers formally adopted new punitive measures, going beyond a fourth set of UN sanctions imposed over Tehran's refusal to freeze its uranium enrichment work, echoed by Canada within hours.

The moves, which follow similar sanctions imposed by the United States, are aimed at reviving moribund talks between Iran and six world powers -- Britain, China, France, Germany, Russia and the US.

"Today we sent out a powerful message to Iran, and that message is that their nuclear programme is a cause of serious and growing concern to us," EU foreign affairs chief Catherine Ashton told reporters.

"But our objective remains, as I have always said, to persuade Iranian leaders that their interest is served by a return to the table. Sanctions are not an end in themselves," she said after the ministers met in Brussels.

Iran's foreign ministry said sanctions were not "an effective tool" and would only serve to "complicate" its showdown with the West.

Oil Minister Masoud Mirkazemi said the punitive measures would have no impact on the country's oil production because European oil firms had "no presence" in Iran's energy sector.

The EU measures include a ban on the sale of equipment, technology and services to Iran's energy sector, hitting activities in refining, liquefied natural gas, exploration and production, diplomats said.

New investments in the energy sector are also banned.

Iran is the world's fourth largest producer of crude oil, but imports 40 percent of its fuel needs because it lacks enough refining capabilities to meet domestic demand.

The Iranian banking sector was also hit by restrictions, forcing any transactions over 40,000 euros (52,000 dollars) to be authorised by EU governments before they can go ahead.

The identities of those hit by the new measures will be published in the official EU journal on Tuesday. Diplomats said 41 individuals and 22 government entities were concerned.

Canada's sanctions take aim at Iran's energy and banking sectors, as well as chemical, biological and nuclear activities, Foreign Minister Lawrence Cannon said.

Canada will also bar all new investment in Iran's energy industry, particularly crude oil refining and liquefied natural gas.

Ashton has exchanged letters with Iran's chief nuclear negotiator Saeed Jalili in recent weeks in a bid to revive talks, and Tehran has indicated that the talks could resume in September.

The last high-level meeting between Iran and the six world powers was held in Geneva in October 2009 when the two sides agreed a nuclear fuel swap that has since stalled.

Western powers have demanded that Iran suspend its uranium enrichment programme, fearing that Tehran would use the material to build a nuclear bomb. Tehran says its atomic programme is a peaceful drive to produce energy.

Iran's actions "are bringing it closer and closer to possessing nuclear weapons which represents a threat," said Cannon.

British Foreign Secretary William Hague said: "Iran's ongoing refusal to engage constructively on this issue leaves us no option but to implement these sanctions."

The longer Iran refuses to talk to the six world powers, "the greater the pressure and isolation Iran will bring upon itself," he added.

Israel welcomed the sanctions and urged other countries to follow suit.

Iranian Foreign Minister Manouchehr Mottaki said at the weekend Tehran was ready to hold immediate talks on a nuclear swap deal brokered by Turkey and Brazil in May.

World powers have given the cold shoulder to that deal, a counter-proposal to the October agreement.

But Iran answered questions raised by the United States, Russia and France over the May deal in a letter delivered to the Vienna-based International Atomic Energy Agency on Monday, the IAEA said.

Ashton said she "welcomed" the move but had to study the details.

earlier related report
Russia says Ahmadinejad comments 'unacceptable'
Moscow (AFP) July 26, 2010 - Russia on Monday angrily slammed Iranian President Mahmoud Ahmadinejad's criticism of Moscow in the nuclear crisis as unacceptable and irresponsible, as tensions spiral with its traditional ally.

Ahmadinejad last week dubbed his Russian counterpart Dmitry Medvedev the "mouthpiece" of Iran's enemies, in his strongest attack yet on Moscow after months of rising tensions between the Kremlin and the Islamic republic.

"For us the recent public statements of the Iranian President Mahmoud Ahmadinejad are categorically unacceptable," a Russian foreign ministry statement said.

It said that Ahmadinejad's comments "distorted Russia's objective approach, our independent, constructive line towards the Iranian nuclear programme with the aim of finding a political and diplomatic resolution."

"We consider that instead of fruitless and irresponsible rhetoric, the Iranian leadership should take concrete, constructive steps towards the speediest regulation of the situation."

Iran is under four sets of UN sanctions over its refusal to heed repeated Security Council ultimatums to suspend uranium enrichment, the most controversial part of its nuclear programme.

Iran says that it is enriching uranium purely for peaceful use, but Western powers are concerned that it intends to develop a nuclear weapon.

Russia is "counting on the speedy resumption of dialogue between Iran and the 'Six'," the ministry said in the statement, referring to nuclear talks between Tehran and a group of six major world powers, including Russia.

Russia, traditionally a diplomatic and economic ally of Iran, in the past took a milder line against Tehran than Western powers but recently has noticeably hardened its position, sparking anger in Tehran.

Medvedev declared earlier this month that Iran was close to having the potential to build a nuclear weapon, the first time a Russian leader had warned so explicitly of the dangers of the Iranian nuclear programme.

In the face of rising tensions, the energy ministers of the two countries met earlier this month with energy-hungry Iran winning a pledge from Moscow to supply fuel, despite unilateral US and EU sanctions targeting its energy sector.

Iran is the world's fourth largest producer of crude oil, but imports 40 percent of its fuel needs because it lacks enough refining capabilities to meet demand.