By Adrian Croft
Miliband said Britain was working with its allies to agree on a united international position for dealing with the new Iranian government following the contested June 12 election won by President Mahmoud Ahmadinejad.
He said the European Union would have to impose tougher sanctions on Iran if it did not accept an international offer for talks on its nuclear program by the end of the year.
Nine Iranian staff of the British embassy were initially detained, accused of stirring mass protests which followed the disputed election. Five were later released. Britain rejects Tehran's charge of interfering in Iranian politics.
"We are extremely concerned at the continued detention of some of our locally engaged staff in Tehran. This is unacceptable harassment and intimidation, as European foreign ministers made clear in their joint statement on Sunday," Miliband told parliament.
"I have discussed this issue with Iranian Foreign Minister (Manouchehr) Mottaki and we both agreed in our second telephone conversation yesterday that a swift resolution was in both of our interests," Miliband said, calling for the release of the employees.
He said Mottaki had told him he wanted to raise the level of Iran's engagement with Britain and other European countries.
"It's not the Ministry of Foreign Affairs in Tehran who goes around arresting people. But I made very clear, and Mr Mottaki understood and responded to this, that we did expect the Ministry of Foreign Affairs to engage actively in securing the release of the remaining staff … And that's certainly what's going on at the moment," he added.
Miliband said Britain would work "intensively" with its partners over the next three weeks to ensure a united international position on dealing with the Iranian government. Ahmadinejad is due to be sworn in between July 26 and August 19.
Asked if the EU should prepare now to impose tougher sanctions on Iran if it did not enter negotiations on its nuclear program by year-end, Miliband said: "Yes, we will need to go further. Yes, there does need to be private work about the when and the how but I would underline the word 'private'."
Britain and other Western countries suspect Iran of seeking to develop nuclear weapons. Iran denies this, saying it only wants a civil nuclear program to generate electricity.
(Editing by Mark Trevelyan)
