Iran said on Sunday it would press ahead with its nuclear program despite what it called an "illegal" United Nations resolution imposing new financial and arms sanctions, adding that it would limit its cooperation with the UN nuclear watchdog in wake of the sanctions.

"Iran will not stop its peaceful and legal nuclear trend even for one second because of such an illegal resolution," Iranian President Mahmoud Ahmadinejad said on his Web site www.president.ir.

The UN Security Council unanimously approved the sanctions against Tehran on Saturday for its refusal to suspend a nuclear program, but major powers also offered new talks and renewed an economic and technological incentive package offer.

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"The Iranian nation will not forget those who backed and those who rejected [the resolution], while adjusting its international relations," he said without indicating what that adjustment in ties would entail.

The sanctions would stay in place until Iran halts the enrichment of uranium and the reprocessing of spent nuclear fuel, which can be used to make a bomb or to generate power. Iran has 60 days to comply or face possible new sanctions.

Major powers have previously said negotiations on Iran's nuclear program could not begin until Tehran halts uranium enrichment.

A government spokesman said Iran would limit its cooperation with the UN watchdog, the Vienna-based International Atomic Energy Agency. Gholam Hossein Elham said the cabinet on Sunday decided to suspend code 1-3 of minor arrangements of the safeguards with the IAEA.

The suspension would continue until Iran's nuclear case is referred back to the IAEA from the UN Security Council, Elham said.

The adoption of the resolution will affect Iran's cooperation with the so-called "subsidiary arrangements" with the IAEA, spokesman Gholamhossein Elham said on state television.

A senior Iranian nuclear official told Reuters these arrangements, accepted by Iran in 2002, meant Iran would declare any plans it had to build new atomic-related facilities.

By suspending its cooperation with this agreement, it would inform the IAEA only six months before introducing nuclear material into any new facility, said the official, who asked not to be identified.

EU seeks to revive talks with Iran as UN tightens sanctions
The European Union will seek to revive dialogue with Iran after the UN Security Council toughened sanctions on Tehran for refusing to halt sensitive nuclear work, EU foreign policy chief Javier Solana said on Sunday.

Solana spoke a day after the Security Council voted unanimously to impose tougher sanctions on Iran to push Tehran to meet the international community's demand that it suspend its nuclear enrichment program.

Tehran meanwhile escalated its rhetoric, maintaining that the 15 British naval personnel arrested by Revolutionary Guard units in the disputed Shatt al-Arab waterway on Friday had "confessed" to entering Iranian territorial waters in an act of "blatant aggression."

Solana said he planned to speak to chief Iranian negotiator Ali Larijani on Sunday to assess the scope for relaunching negotiations that collapsed after Iran refused to suspend its uranium enrichment programme, which the West suspects is aimed at developing nuclear weapons.

"I'm going to get in contact with Mr Larijani this morning if I can to see if we can find a route that would allow us to go into negotiations," Solana told reporters in Berlin, where he was attending a summit marking the 50th anniversary of the EU's founding Treaty of Rome.

Security Council approves new sanctions
The Security Council approved a ban on Iranian arms exports and a freeze of the assets of 28 additional people and organizations involved in Iran's nuclear and missile programs. The list includes Sepah, a government-owned bank.

"This resolution sends an unambiguous signal to the government and people of Iran ... that the path of nuclear proliferation by Iran is not one that the international community can accept," said British Ambassador Emyr Jones Parry.

Iran has vowed the sanctions will only motivate it to pursue nuclear power, a message Foreign Minister Manouchehr Mottaki was expected to deliver to the Security Council.

Mottaki made the trip instead of Iranian President Mahmoud Ahmadinejad, who claimed he canceled his appearance because the U.S. failed to deliver his visa in time.

The new sanctions - a compromise between the stronger measures favored by the United States and the Europeans and the softer approach advocated by Russia and China - are considered modest.

The Security Council imposed its first set of sanctions in December, but Iran responded by expanding enrichment. Iran says it will never give up its right to enrich uranium and produce nuclear fuel, though it has offered to provide guarantees that its nuclear program won't be diverted toward weapons.

Ahmadinejad had said he wanted make those arguments before Security Council himself, but Iran accused the United States of thwarting his planned trip by delaying the delivery of his visa. U.S. State Department deputy spokesman Tom Casey said the visa arrived in time and suggested the Iranian president was unwilling to stand before the Council and take the heat for his continued defiance of the international community.

In December, the Security Council ordered all countries to stop supplying Iran with materials and technology that could contribute to its nuclear and missile programs and to freeze assets of 10 key Iranian companies and 12 individuals related to those programs.

The new resolution calls for voluntary restrictions on travel by the individuals subject to sanctions, on arms sales to Iran and on new financial assistance or loans to the Iranian government.

It asks the International Atomic Energy Agency to report back in 60 days on whether Iran has suspended enrichment and warns Iran could face further measures if it does not. But it also says all sanctions will be suspended if Iran halts enrichment and makes clear that Tehran can still accept the package of economic incentives and political rewards offered last year if it complies with the Council's demands.

In a key compromise, the document refers to a past resolution from the IAEA calling for the Middle East to be free of weapons of mass destruction. Indonesia and Qatar had wanted the council to make that appeal outright, but the U.S. intervened, adopting instead an IAEA statement that "a solution to the Iranian nuclear program would contribute to international efforts against nuclear proliferation including efforts relating to the Middle East."

Meanwhile, Iran has moved the 15 British seamen it has held in custody since Friday to Tehran for interrogation.

The British Marines and sailors were arrested after having completed a search of a merchant ship Friday morning in the disputed Shatt al-Arab waterway.

Britain immediately demanded the return of its troops and denied they had strayed into Iranian waters.

In London on Saturday, Foreign Office undersecretary Lord Triesman spent more than an hour with the Iranian ambassador to London, Rasoul Movahedian, demanding the safe return of the 15 and seeking assurances of their welfare and consular access.

Foreign Secretary Margaret Beckett and the Ministry of Defense said the troops were in Iraqi waters at the time they were picked up.

In June 2004, six British Marines and two sailors were captured, then paraded blindfolded on Iranian television. They admitted they had entered Iranian waters illegally but were released unharmed after three days.

Iranian hard-liners have already called for the 15 Britons to be held until Iran wins political concessions from the West.

British opposition lawmakers called on the government not to allow Iran to use the capture of the military personnel as a tool in the nuclear dispute.