MOSCOW - Russian Foreign Minister Sergei Lavrov on Thursday signaled Russian opposition to a draft UN Security Council resolution proposed by European nations that would impose sanctions on Iran over its disputed nuclear program, news agencies reported.

Lavrov said the resolution that would impose limited sanctions because of Iran's refusal to cease uranium enrichment - a process that can produce material for nuclear power reactors or weapons - does
not match existing agreements between major powers.

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Russia and China, both veto-wielding permanent member of the council which have strong commercial ties with Tehran, have consistently been reluctant to support sanctions. A key concern for Moscow is the future
of its $1 billion contract to build Iran's first nuclear power station.

"Our goal is to eliminate the risks of sensitive technologies getting into the hands of Iran until the IAEA [the International Atomic Energy
Agency] clarifies issues of interest to it, while maintaining all possible channels of communication with Iran," Lavrov was quoted as
saying by Interfax, RIA-Novosti and ITAR-Tass.

"And it seems to me that in this respect the proposed draft
resolution clearly does not meet the tasks earlier agreed by the
six," Lavrov said, on the sidelines of an international Arctic conference
in the Russian far north.

Russian Deputy Foreign Minister Sergei Kislyak said Russia's project to build a nuclear power station in the southwestern Iranian city of Bushehr was one of several obstacles holding up agreement on the UN resolution.

"Lengthy negotiations will be needed to find a mutually acceptable solution," Interfax quoted him as saying.

The six major powers of the United States, Russia, Germany, France, Britain and China have offered Iran a package of incentives to persuade it to halt sensitive uranium enrichment activity but Tehran has so far refused the offer.

European nations this week proposed sanctions - banning the sale of missile and atomic technology to Iran and ending most UN help for its nuclear programs - after weeks of exploratory talks with an European Union negotiator ended without progress. The sanctions impose limits on Russia's Bushehr project.

Russia has steadfastly rejected U.S. demands to halt work on Bushehr and last month it agreed to supply fuel for the plant in March 2007, allowing the facility to go online in September.

The United States has been pushing for even tougher sanctions, and Richard Grenell, spokesman for the U.S. Mission to the United Nations, said Wednesday there would be "American changes to the proposed European text." He refused to elaborate.

The head of the Russian state company that is in charge of the Bushehr project said Thursday that it would completed on time.

"All work on the nuclear power station is being carried out in line with the existing timetable," Atomstroiexport's chief Sergei Shmatko was quoted as saying by ITAR-Tass.

Lavrov reiterated that Russia favors continued dialogue with Iran instead of punishment.

Moscow's aim is to "create the conditions for the launch of a
negotiated process to resolve the Iranian nuclear problem," he said according to ITAR-Tass.