These sanctions are just the start, Obama tells Iran

Iran today hit back at the latest European and US sanctions threats as "psychological warfare" and Barack Obama pledged further action if Tehran did not abandon its nuclear ambitions.

In a further ratcheting up of tensions in the Gulf, the US president pledged to "increase the pressure on Iran" if it did not address "the serious threat presented by Iran's nuclear programme".

Yesterday Europe announced an embargo on Iranian oil imports would take place from July and Washington imposed its own sanctions on Iran's oil trade and central bank.

If enacted, the oil embargo would have a devastating effect on the Iranian economy, which is being forced to agree oil contracts with Asian buyers at greatly discounted rates. Tehran has long said such an action would be tantamount to a declaration of war.

But Iran's intelligence chief said the sanctions simply would not work. "Ineffective Western sanctions are not a threat to us, but an opportunity that has brought a lot of benefits," said Heidar Moslehi. These, he said, were that Iran was becoming self-sufficient, instead of relying on the outside world to meet all its needs.

Experts believe the oil deadline again raises the likelihood of a clash in the summer. The US has already increased its troops in Kuwait to 15,000, including a helicopter unit, and is expected to move another aircraft carrier into the region.