Diplomats from six world powers hope to present a new package of proposed sanctions against Iran to the U.N. Security Council Wednesday.
Iranian President Mahmoud Ahmadinejad has dismissed the threat of more sanctions over his country's nuclear program, saying world powers are only "isolating themselves."
Also Wednesday, Iran's chief nuclear negotiator, Ali Larijani, said any attack on Iran would be met with a military response.
In other news, Atomstroiexport, the Russian company building a nuclear power plant in Iran, says "irretrievable" damage may be caused by Iran's late payments.
On Monday, the company accused Iran of failing to make scheduled payments, a charge Iran denies.
The company said it is postponing the launch of the Bushehr plant.
Responding to Russia's move, Larijani said any delay in launching the plant will have a negative impact on trade between the two countries.
The U.S. administration supports Russia's decision to delay the launch of the Bushehr nuclear plant.
Meanwhile, in New York Wednesday, Israel's foreign minister Tzipi Livni urged the security council to pass tougher sanctions against Iran over its nuclear program.
On Tuesday, envoys from Germany and the five permanent Security Council members (the United States, Britain, France, Russia and China) held talks at the United Nations on a new sanctions resolution.
Russia's Ambassador Vitaly Churkin described the talks as "very good," but also said there were lingering concerns. China also indicated it still has questions.
The new sanctions are expected to include an embargo on Iran's arms exports. They would be added to the limited financial and trade sanctions imposed last December after Tehran ignored a Security Council deadline to stop enriching uranium.
The United States and its allies suspect Iran is working to develop nuclear weapons, a charge Tehran denies.
Some information for this report was provided by AFP, AP and Reuters.