Western powers voiced deep misgivings about a plan brokered by Brazil and Turkey for Iran to send abroad 1,200 kg (2,646 lb) of its low-enriched uranium in return for reactor fuel, and supported a fourth round of sanctions this month.

Turkey and Brazil, non-permanent members of the Security Council, voted against the resolution.

"We still believe a solution can be found. We are determined to continue our efforts," Davutoglu told reporters on the sidelines of a summit of southeast European leaders. "Brazil will continue to be with us."

Brazil's Foreign Minister Celso Amorim said on Monday he still hoped an earlier outline agreement could serve as the basis for further talks with Tehran.

Davutoglu said he spoke with Amorin and with Iran's Foreign Minister Manouchehr Mottaki on Saturday and that he planned to talk to German Foreign Minister Guido Westerwelle on Tuesday.

Germany is one of six world powers seeking to revive negotiations with Iran over its disputed nuclear program. The others are Britain, China, France, Russia and the United States.

"We took a joint decision to carry out this process together," Davutoglu said. "We have discussed with Tehran a response with positive elements (to the International Atomic Energy Agency)."

Iran said on Tuesday its barring of two nuclear inspectors serves as "notice" to the head of the UN atomic agency but added Tehran was ready for talks with the IAEA as suggested by France.

"This action (banning the inspectors from entering Iran) is in reality a regulatory notice to (Yukiya) Amano to be careful so that the agency's inspectors do not violate the international entity's charter," Mottaki said, quoted by the official news agency IRNA.

"Amano should manage the agency professionally," he said, referring to the chief of the UN atomic watchdog.

On Monday, Iran announced it was barring two IAEA inspectors from entering the country, accusing them of filing a "false report" and "leaking information" about Tehran's nuclear program which the West suspects masks a weapons drive.

The Islamic republic says its nuclear program is purely for peaceful purposes.

Iran's atomic chief Ali Akbar Salehi said Tehran told the IAEA at its latest meeting that the inspectors had filed a "totally wrong report" and called for them to be replaced by two other inspectors for visits to the country.

Washington quickly criticized Tehran, saying the ban on the inspectors was "symptomatic of its longstanding practice of intimidating inspectors."

"Reducing cooperation with the IAEA will only deepen the world's concern with respect to its nuclear program," State Department spokesman Philip Crowley said in Washington.

The ban on inspectors came less than a fortnight after the UN Security Council imposed new sanctions against Iran after a resolution sponsored by the United States.

Top US lawmakers further pressured Iran on Monday as they reached a deal on a series of unilateral punitive measures against Tehran, separate from the UN sanctions.

The European Union too has imposed separate sanctions against Iran.

But French President Nicolas Sarkozy, whose government backed the UN sanctions, has offered to hold talks with Iran at the IAEA over its atomic program,zy's offer.

"We believe there are serious signs that France is willing to conduct an independent action," Mottaki said.

"We see this approach as positive. If there are more serious signs of such a will, then Europe can enter a new phase of playing a greater role" in resolving Iran's nuclear issue, he said.

Sarkozy told his Russian counterpart at a meeting in Saint Petersburg on Saturday that France was ready "without delay" to hold talks with Iran in Vienna where the IAEA is based.

He reportedly said that the talks can address the fuel swap deal brokered by Brazil and Turkey on May 17 and can also "restart negotiation between Iran and the six powers about the (overall) nuclear issue."

Talks between Iran and the six world powers — Britain, France, Russia, China, the United States and Germany — have been on the backburner since the fuel swap deal hit a deadlock.

The deal, which is a counter proposal to an IAEA plan drafted last October, envisages Tehran sending 1,200 kilograms of its low-enriched uranium to Turkey after which Iran would be supplied at a later date with 20 percent enriched uranium by Russia and France.

Brazilian Foreign Minister Celso Amorim said on Tuesday that Iran's willingness to stick to the swap deal, despite the latest sanctions, was "positive."

"There is a will to maintain the deal as a base, which is positive because after what happened in the Security Council, you could fear a less flexible reaction on Iran's side," Amorim told reporters during a visit to Bucharest.

"I am encouraged by the fact that in spite of a lot of rhetoric, which is natural, President Ahmadinejad said that the Tehran Declaration (the nuclear fuel swap deal) was still on the table," he added.