"Oil sales to British and French companies have ceased," spokesman Ali Reza Nikzad Rahbar said in a statement on the ministry's official website. "We have taken steps to deliver our oil to other countries in the place of British and French companies," he said.

The decision was not expected to have a big impact. France last year bought only three percent of its oil — 58,000 barrels a day — from the Islamic republic, and Britain was believed to be no longer importing Iranian oil. But it was seen as a warning shot to other EU nations that are bigger consumers of Iranian oil, including Italy, Spain and Greece.

Although those countries were not affected by Iran's announcement on Sunday, they are included in an EU decision to stop buying Iranian oil that was announced last month and which will take full effect from July.

Iran has been threatening for weeks to cut all oil exports to Europe because of the EU ban, but has thus far held off. Ceasing all exports to the EU would harm its own economy unless it had Asian buyers ready to pick up the contracts.

British Foreign Secretary William Hague said Sunday that Israel would not be "wise" to attack Iran over its disputed nuclear program, saying it should give the diplomatic route a chance to succeed.

Speaking in the wake of attacks on Israeli diplomats blamed on agents of Tehran, Hague said Iran "has increased in its willingness to contemplate utterly illegal activities in other parts of the world."

But he told BBC television: "I don't think the wise thing at this moment is for Israel to launch a military attack on Iran. "I think Israel, like everybody else in the world, should be giving a real chance to the approach that we have adopted, of very serious economic sanctions and diplomatic pressure, and the readiness to negotiate with Iran.

"And that's what we now have to make a success of." President Barack Obama's national security adviser huddled with Israeli leaders on Sunday to discuss Iran's nuclear program following growing speculation that Israel is planning military action against Tehran. Tom Donilon was expected to meet Israel's Prime Minister Benjamin Netanyahu and Defense Minister Ehud Barak before leaving on Monday.

However, the top US military commander said it would be "premature" to take military action against Iran in response to its nuclear program.

In recent weeks, there has been feverish speculation that Israel was getting closer to mounting a pre-emptive strike on Iran's nuclear facilities, but Israel has denied reaching such a decision.

Hague said the Israelis had not shared any such plans with Britain, stressing: "We are not part of any planning to attack Iran.

"We don't take any options off the table... But our approach is 100 percent diplomatically and economically focused to bring Iran successfully to the negotiating table."

Iran said this week it was ready to resume stalled talks on its nuclear drive, prompting a cautious welcome from the United States and the EU.

"They have indicated in the last few days a new readiness to negotiate. Whether that is going to be on any meaningful basis, one has to be skeptical," Hague said.

Gen. Martin Dempsey, chairman of the US Joint Chiefs of Staff, also told CNN's "Fareed Zakaria GPS" program that economic sanctions have to be given a chance to work, and the United States and its allies should be better prepared for a military option.

"I think it would be premature to exclusively decide that the time for a military option was upon us," Dempsey said, according to excerpts of the interview released by CNN.

"I think that the economic sanctions and the international cooperation that we've been able to gather around sanctions is beginning to have an effect," he added.