The Obama administration narrowed in on Iran's all-powerful Revolutionary Guard by imposing new sanctions Wednesday on the force behind suspect nuclear work and urging the world to do the same.

It ordered a freeze on assets of an individual and four firms linked to the Revolutionary Guard -- a unilateral US step toward what President Barack Obama has warned will be a "significant regime of sanctions" backed internationally.

The Treasury Department designated a Revolutionary Guard commander and four subsidiaries of a construction firm owned or controlled by the elite unit as "proliferators of weapons of mass destruction and their supporters."

State Department spokesman Philip Crowley said the US is targeting the Islamic Revolutionary Guard Corps for its role in Iran's nuclear and missile programs, alleged links to terrorism and crackdown on anti-government protests.

The Revolutionary Guard, which has been hit by repeated sanctions in the past, is also a major business force in Iran.

Crowley said US diplomats put "particular emphasis" on the elite military branch when they consult with other powers about sanctions, but they were not yet ready to put a draft resolution on the table at the UN Security Council.

"Our objective here is to try to put pressure on the government and those who are supporting its policies, without having undue impact on the Iranian people," Crowley told AFP.

The United States has been consulting with Russia, China, Britain, France and Germany on Iran, but Beijing now appears to be the lone hold-out against sanctions and is calling for further negotiations.

The six powers have been leading a multi-year effort to curb Iran's uranium enrichment program, which the West fears masks a drive to build a nuclear bomb. Iran denies the charge, saying it is for peaceful use of energy.

All but Germany are veto-wielding members of the UN Security Council.

In Ottawa, Prime Minister Stephen Harper said Canada will use its Group of Eight presidency to press the club of world's richest nations for more sanctions against Iran.

These countries are the United States, Canada, Japan, Britain, France, Germany, Italy and Russia.

Obama's warning, combined with the Treasury action, come after Iran announced on Tuesday that it had begun work to enrich uranium to 20 percent, which it says is for a medical research reactor in Tehran.

The move suggested Iran was spurning a four-month-old proposal by the UN's International Atomic Energy Agency (IAEA) to ship most of its stocks of 3.5-percent enriched uranium abroad to be further upgraded to fuel the reactor.

Experts say that once Iran enriches uranium to 20 percent, it can proceed to the 93 percent needed to produce nuclear weapons since the technology is the same. Iran maintains the enrichment is purely for civilian energy purposes.

"Despite the posturing that the nuclear power is only for civilian use... they in fact continue to pursue a course that would lead to weaponization, and that is not acceptable to the international community," Obama said.

After trying to engage Iranian leaders and persuade them to accept the IAEA deal to defuse the crisis, Obama said the world must be prepared to pressure Iran to change course, even if the "door is still open" to negotiations.

In an apparent further bid to call Iran's bluff, Crowley told reporters Tuesday the United States would propose an alternative to allow Tehran to import the medical isotopes it says it needs for cancer patients.

Iran dismissed the offer on Wednesday.

A US official told AFP on the condition of anonymity that the Revolutionary Guard is allowed to benefit from big non-bid government contracts that normal Iranian companies have no capacity to seek.

In previous years the guard corps might "have been able to profit from sanctions through their black market activities, but now they're so embedded in the economy that they can be targeted," the official said.

Indeed, the Guards now permeate all areas of Iran, with their engineering arm picking up massive contracts and former cadres, like ex-commander Mohsen Rezai who has stood twice for the presidency, moving into politics.

In business, the Guards now reap an increasingly substantial income which the United States is seeking to block.

In 2006, the Guards won a contract worth more than two billion dollars to develop phases 15 and 16 of Iran's biggest gas field, South Pars, and another contract of around one billion dollars to build a pipeline towards Pakistan.

It is also part of a consortium contracted to build a high speed rail link between Tehran and the central city of Isfahan, shipping ports on Iran's south coast, and a major dam in Khuzestan province.

earlier related report
Russia says Iran sanctions more realistic: report
Moscow (AFP) Feb 10, 2010 - New sanctions on Iran have become "more realistic" after Tehran's move to ramp up uranium enrichment, Russia's Deputy Foreign Minister Sergei Ryabkov said Wednesday.

"In this new situation, of course, the question of sanctions, of drafting a resolution for new sanctions has become more realistic," Ryabkov told the Interfax news agency.

"The situation has really become more difficult and very serious," he said.

Iran declared Tuesday it had started the process of producing 20 percent enriched uranium, defying world powers who suspect its atomic drive hides a covert effort to develop a nuclear bomb.

Tehran insists its nuclear programme is strictly peaceful in nature.

Russia -- Tehran's sole ally among the world powers which has traditionally resisted the threat of tough action -- has hardened its stance in line with the United States' call for new sanctions.

"It is a well-known fact that the West is pushing us to support sanctions," said Ryabkov, who has often acted as Russia's pointman in Iran nuclear talks.

He repeated Russia's view that sanctions will not solve the root problem but also made clear that Moscow was ready in principle to support them provided they fulfilled certain criteria.

"Sanctions, if and when the UN Security Council makes the corresponding decision, must serve the purpose of strengthening the nuclear non-proliferation regime," RIA Novosti news agency quoted Ryabkov as saying.

The comments were the latest in a serious of tough remarks from Russian officials that experts said confirmed Moscow's failing patience with Tehran and its intentions to back new measures to punish the Islamic republic.

Tuesday, the powerful head of Russia's national security council, Nikolai Patrushev, said Tehran's announcement cast "doubt" on its claims not to be pursuing atomic weapons.

US President Barack Obama on Tuesday praised Russia for its new "forward-leaning" position on Iran sanctions which he said were needed to punish Tehran's "misbehaviour."

The United States and France have already pressed calls for "strong" new sanctions against Iran, leaving China alone as the main power in the UN Security Council still firmly opposed to a new round of sanctions.

Russia has long-standing ties with Tehran and is helping the Islamic republic construct its first nuclear power station.