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The new draft still would ban the supply of materials and technology that could contribute to Iran's nuclear and missile programs, but it spells out in much greater detail exactly what items are prohibited. Russia and China ¡ª both veto-wielding members of the U.N. Security Council ¡ª had complained that the proposed sanctions in the original draft were too broad.

But the new draft keeps a travel ban and asset freeze on companies, individuals and organizations involved in Iran's nuclear and missile programs, which Russia opposes.

Russia proposed major changes to the original European text including limiting sanctions solely to measures that would keep Iran from developing nuclear weapons and missiles. Russia's proposed changes also eliminated any travel ban, asset freeze or mention of the nuclear facility being built by the Russians at Bushehr, Iran.

The new European draft drops all mention of Bushehr, which is projected to go on line in late 2007 and would be Iran's first atomic power plant.

But it keeps a range of sanctions and still would limit technical assistance to Iran by the International Atomic Energy Agency and urge countries to prevent Iranian students from studying nuclear-related disciplines.

Whether the new draft goes far enough to meet Russia's concerns remains to be seen. At a meeting in Paris on Tuesday, political directors from the five permanent members of the Security Council plus Germany failed to reach agreement though they reported "substantive progress."

Council diplomats said ambassadors from the six countries were expected to discuss the new draft early next week, possibly Monday.

Iran maintains its nuclear program is purely peaceful, aimed solely at producing nuclear energy, but the U.S. and the Europeans believe Tehran's enrichment activities are ultimately aimed at producing nuclear weapons.

Iranian President Mahmoud Ahmadinejad vowed Tuesday to continue the nuclear program, and issued a new threat to downgrade relations with the European Union ¡ª Iran's largest trading partner ¡ª if European negotiators opted for tough sanctions.

Both Russia and China have continued to publicly push for dialogue instead of U.N. punishment, despite the collapse in October of an EU attempt to entice Iran into talks.

The new European draft emphasizes "the importance of political and diplomatic efforts to find a negotiated solution guaranteeing that Iran's nuclear program is exclusively for peaceful purposes."

It also encourages Iran "to engage" with the proposals put forward by the six countries in June. Their package offered economic incentives and political rewards if Iran agreed to consider a long-term moratorium on uranium enrichment and commit to a freeze on enrichment before talks on its nuclear program.

The European draft makes clear that Iran must "without further delay suspend proliferation sensitive nuclear activities" ¡ª specifically all enrichment and reprocessing including research and development, and construction of a research reactor moderated by heavy water.

It also increases pressure on Iran to fulfill requirements set by the IAEA board and would expand the powers of the U.N. nuclear watchdog agency to monitor Iran's nuclear program, which diplomats said Russia views as a "provocation" to Iran.