British Prime Minister Gordon Brown said on Monday that Europe was to agree new sanctions against Iran including freezing the assets of a major Iranian bank.

"People and officials in our country are watchful of the other side's decisions. If they take a decision against Iran, we have options against it," foreign ministry spokesman Mohammad Ali Hosseini was quoted as saying by the state broadcaster.

He did not elaborate further on the possible reaction of the Islamic republic, which is already under three sets of UN Security Council sanctions for its refusal to halt uranium enrichment.

Despite Brown's comments, EU nations on Monday postponed a decision on imposing the new sanctions on Iran. Diplomats said they would wait to see how Tehran responds to the latest offer from world powers to end the crisis.

Iran is to respond to the proposal presented by EU foreign policy chief Javier Solana on Saturday offering it talks on a package of technological and economic incentives, so long as Tehran suspends uranium enrichment.

The West fears Iran could use enrichment to make an atomic bomb but Tehran denies seeking a nuclear weapon, insisting its atomic drive is peaceful.

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