Under Secretary of State Nicholas Burns and political directors from China, Russia, France, Britain and Germany held new discussions by phone and "discussions will now move to New York where our United Nations permanent representatives will take up work on this issue," spokesman Kurtis Cooper said in a statement.

"There is still some work to be done on a few outstanding issues, but all parties remain committed to a second resolution in the near future," he said.

"They had a good discussion in keeping with the positive atmosphere of their conversations" in recent days, he said.

The State Department on Thursday reported the six countries had made progress toward consensus on new UN Security Council resolution tightening sanctions on Iran for its refusal to give up uranium enrichment work that the six powers fear could lead to a nuclear bomb.

The six agreed to "the major elements" of the resolution in a telephone conference Thursday and were to hammer out the remaining differences Saturday, deputy State Department spokesman Tom Casey said Friday.

US officials have expressed hope that UN ambassadors from the six countries could begin drafting a new resolution next week.

As major powers weighed their next move, Iran's hardline President Mahmoud Ahmadinejad held talks with King Abdullah in Saudi Arabia that were expected to touch on Tehran's nuclear program as well as sectarian violence in Iraq and the crisis in Lebanon.

Ahmadinejad left Saudi Arabia late Saturday after the talks, an official Saudi source told AFP. Iran's official ISPA news agency reported on the talks without mentioning whether the two leaders had discussed Tehran's nuclear program.

The UN nuclear watchdog reported last week that Iran had failed to halt its uranium enrichment work and was even expanding its efforts in defiance of international demands.

Iran has denied seeking atomic weapons, and asserts it has a right to a peaceful nuclear program. It vowed again on Tuesday never to yield to the West's demand for a freeze on sensitive nuclear work.

The sanctions imposed in December focused on an embargo on the sale of nuclear-related materials to Iran as well as an asset and travel freeze. The measures were agreed only after months of tense negotiations, with Russia in particular resisting US pressure for tougher action.

Senior US and European officials have indicated that new UN sanctions being drawn up against Iran would involve only a relatively minor tightening of measures imposed by the world body in December.

"This is going to be an incremental resolution," State Department spokesman Sean McCormack told reporters on Friday.

A senior US official said the resolution would not include significant new punitive steps but would rather extend targeted measures against firms and individuals involved with Iran's nuclear and ballistic missile programs.

French Foreign Minister Philippe Douste-Blazy also said Friday in Paris that the new resolution would focus on "deepening" of the targeted actions taken in December.

McCormack acknowledged Friday that Washington had been surprised at the effectiveness of the December resolution once it had been watered down by Russian objections.

US officials assert that the mere existence of mandatory UN sanctions against Tehran has begun to discourage foreign investors from doing business in Iran and is fueling unusual dissent inside the country against Ahmadinejad.

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