Britain's Miliband to Iran: Dispel nuclear fears or face new penalties

British Foreign Secretary David Miliband on Friday urged Iran to work with the United Nations nuclear watchdog to disprove suspicions that its nuclear activities were geared toward producing weapons - and warned of new penalties if it does not.

Miliband also criticized Tehran's decision to launch a satellite this week, while Germany's foreign minister urged the Iranian regime to engage in direct diplomacy with the United States.

Iran launched an Omid satellite Monday - touching off concerns among experts in Europe, the United States and Israel about the potential for links between its satellite program and its work with missiles and nuclear technology.

Speaking outside the Munich Security Conference - a gathering of a dozen world leaders and more than 50 top ministers - Miliband said that even if the launch was for civilian purposes as Iran claims, it sent the wrong signal, considering U.S President Barack Obama's offer to talk directly with Iranian leaders to defuse the nuclear crisis.

"Given that President Obama said that he was stretching out a hand if Iran would unclench its fist, I don't think that this was an unclenching of a fist," Miliband told AP Television News.

"The commitment of the new American administration to engage with Iran is right and important, but if Iran defies international opinion then there inevitably have to be stronger and tougher sanctions," he said, referring to the possibility of new U.N. Security Council measures.

The new U.S. ambassador to the United Nations, Susan Rice, has said Obama's administration will engage in direct diplomacy with Iran.

German Foreign Minister Frank Walter Steinmeier opened the three day meeting, which includes an Iranian delegation led by Ali Larijani, the country's parliament speaker and former chief nuclear negotiator, urging that Iran take the United States up on the offer.

"Above all, I appeal to those responsible in Tehran: Take this chance," Steinmeier said.

Iran insists its nuclear program is designed for peaceful purposes, such as the production of electricity, but Western governments believe the country is trying to develop nuclear weapons. They have offered a mix of sanctions and inducements to try to persuade Iran to abandon the program.