Senior diplomats of major world powers, meeting in Washington Monday, reaffirmed a two-track strategy on the Iran nuclear issue. They are pursuing new sanctions in the U.N. Security Council while also offering Tehran negotiations. VOA's David Gollust reports from the State Department.

An Iranian technician works at the Isfahan Uranium Conversion Facilities (UCF), 420 kms south of Tehran (File)

The meeting here of diplomats of the five permanent U.N. Security Council member countries and Germany lasted several hours but produced only a terse public statement reiterating their dual-track approach toward Iran.

The P-Five Plus One grouping is offering Iran open-ended political negotiations and various incentives if it halts its uranium enrichment project, but threatening tougher sanctions if it does not.

In a written statement, State Department Deputy Spokesman Tom Casey said the meeting chaired by Undersecretary of State Nicholas Burns discussed last week's report by the International Atomic Energy Agency which faulted Iran for failing to fully answer questions about its past nuclear activity.

Casey said they discussed next steps in the Security Council with the anticipation of a vote soon on the draft currently before the council.

The draft, which could come up for a vote as early as Friday, is weaker than the United States had wanted due to resistance from Russia and China to tough penalties against the Iranian military.

The Bush administration, accordingly, is looking to tighten sanctions it has imposed unilaterally and The Wall Street Journal reported Monday Iran's central bank, Bank Markazi, has become a potential U.S. target.

In a talk with reporters, Spokesman Casey declined specific comment on the report but did not rule out action against the Iranian state bank.

"We're going to make sure that we look very closely at all institutions that are out there that might be contributing to Iran's nuclear program," said Tom Casey. "You know the kinds of actions we've taken in the past with respect to a couple Iranian banks, with respect to some individuals or corporations that have been involved in promoting their nuclear programs."

The Wall Street Journal said Treasury Department officials believe Bank Markazi has been helping Iranian commercial banks circumvent U.S. sanctions.

A Treasury spokesman also would not directly discuss the newspaper account, but said Iran has been seeking parties willing to help it get around the penalties.

He said Treasury Undersecretary for Terrorism and Financial Intelligence Stuart Levey will visit Gulf financial centers - Qatar, Bahrain and the United Arab Emirates - this week to try to build support for further isolating Iran.