Foreign policy chief of the European Union (EU) Javier Solana proposed limited sanctions against Iran, including visa bans on key Iranian figures, if Tehran continues to defy the UN over its disputed nuclear program, a British newspaper reported yesterday.

Other proposed sanctions included a block on the transfer of civilian nuclear technology, an arms embargo and suspension of negotiations with Iran on a free trade pact, according to the Guardian.

The newspaper also said the EU would also fund propaganda broadcasts against Tehran.

According to the Guardian report, the sanctions were discussed on Monday at a closed-door meeting in Luxembourg of foreign ministers from the EU's 25 countries. And no decision will be taken until the expiry of a 30-day deadline set by the U.N. Security Council on March 29 for Iran to comply.

British Foreign Secretary Jack Straw, who attended the meeting, confirmed that the EU was talking about sanctions but said it was only on a contingency basis at the current stage.

German Foreign Minister Frank-Walter Steinmeier said the EU would only adopt restrictions of its own against Iran if there was deadlock in the security council, where both Russia and China are resisting sanctions.

Solana, however, said the EU would not participate in military action against Iran.

"Any military action is definitely out of the question for us," he told reporters.

Tensions over Iran's nuclear issue have been further escalated as U.S. media reported over the weekend about plans for possible military strikes on Iran's nuclear facilities.

An article published in the latest issue of the New Yorker magazine asserted that the Pentagon has presented the White House with an option to use bunker-buster nuclear bombs against Iran's underground nuclear sites.

On Monday, U.S. President George W. Bush rejected the reports of plans for military strikes on Iran as "wild speculation," saying that force is not necessarily required to stop Iran from having a nuclear weapon.

The UN Security Council on March 29 adopted a presidential statement urging Iran to re-suspend all activities related to uranium enrichment in 30 days.

Iranian officials have repeatedly voiced that the country would never compromise.

ElBaradei's (sub-editor's job: finding full name and title of ElBaradei?) upcoming visit to Iran has been viewed as a last-ditch effort to ease the escalating tension over Iran's nuclear issue as he is expected to submit a report on Iran's compliance with the Security Council's demand by the end of this month.