New sanctions would show that "the international community is united behind a diplomatic resolution to Iran's nuclear issue, and stave off any pre-emptive moves by others to resolve this issue by other means," Britain's UN envoy Mark Lyall Grant told the 15-member council.
He stressed that the proposed new UN sanctions should "be smart and effective" and should "target areas with an impact on the regime's policy calculations."
"They should show the regime the extent to which the costs of their nuclear program outweigh any dubious benefits," Lyall Grant added. "At the same time, we should reaffirm our willingness to continue to engage with Iran."
Iran, which maintains that its nuclear program is solely for electricity generation, has ignored three rounds of Security Council sanctions and refuses to halt uranium enrichment, which the West sees as a cover to build nuclear weapons.
US Ambassador to the UN Susan Rice also urged the council to "consider further measures to hold the government of Iran accountable" but stressed that a fourth Security Council sanctions resolution was not being circulated in the council at this time.
"We are not at the present circulating a draft text (on sanctions) to council colleagues here in New York," she told reporters.
Rice made the comments a day after US Secretary of State Hillary Clinton failed to persuade Brazil, a non-permanent council member, to back the new sanctions proposed by Britain, France, Germany and the United States.
In talks with Clinton, Brazilian President Luiz Inacio Lula da Silva and his Foreign Minister Celso Amorim backed continued international talks to ensure Iran does not enrich uranium to the point it can build a nuclear bomb.
Lula warned the world not to "push Iran into a corner."
Diplomats here say other non-permanent council members, notably Turkey and Lebanon, are also lukewarm toward sanctions and may abstain in a vote.
Rice insisted that the six powers involved in the nuclear standoff with Iran — veto-wielding Security Council members Britain, China, France, Russia and the United States plus Germany — were all committed to a dual-track strategy.
This involves pressure through sanctions while pursuing negotiations.
France's deputy UN ambassador Nicolas de Riviere took a tough line, saying: "We have no other choice but to seek the adoption in the coming weeks of new measures by the UN Security Council, in line with the dual approach strategy."
Russia has signaled that it would be prepared to back sanctions provided they target Iran's nuclear proliferation activities only.
But China, which has close energy and economic ties with Tehran, has so far refused to go along.
China's deputy UN ambassador Liu Zhenmin, while insisting that Beijing remains committed to the dual-track strategy, Thursday again questioned the effectiveness of sanctions.
"We believe that sanctions are not an end in themselves and in no way can they provide a fundamental solution to this issue," he added. "Therefore diplomatic negotiations and a peaceful settlement still remain the best choice in this regard."
Russian Ambassador Vitaly Churkin said talks with Iran had not been exhausted.
"There is still an opportunity to agree to a persuasive mutually acceptable fuel exchange model for Iran's research reactor," he said, referring to a controversial International Atomic Energy Agency-brokered deal to supply higher grade nuclear fuel for a Tehran research reactor.
Under the proposed accord, hammered out last October in Vienna, Russia and France would produce fuel from Iran's own stockpile of low-enriched uranium, currently estimated at just over 2,065 kilogrammes (4,500 pounds), for the Tehran reactor that makes medical isotopes. But Iran is reluctant to sign up.
