"It is a useless approach and serves the hostile purposes of the US statesmen and therefore we condemn it," foreign ministry spokesman Mohammad Ali Hosseini was quoted as saying by state media.

"The passing of such laws has no consequences except damaging US interests and increasing the isolation of the United States. Sanctions cannot weaken the will" of Iran, he added.

The measure, signed into law by President George W. Bush, is seen as a clear warning to Russia and China, two permanent members of the UN Security Council that have resisted calls for new international sanctions against Tehran.

It comes amid increasing tension over Iran's nuclear programme, with the United States leading a drive for the Islamic republic to be taken before the Security Council for sanctions.

The United States broke off diplomatic relations with Iran after the seizure of its embassy in Tehran in 1979 and maintains a raft of sanctions on the Islamic republic that include a trade embargo.