TEHRAN, Iran - Iran's top leader warned Wednesday his country will pursue "illegal actions" if the UN Security Council insists it halt uranium enrichment, an apparent reference to nuclear activities outside international regulations.

Iranian supreme leader Ayatollah Ali Khamenei, delivers a speech in a public gathering at the city of Mashhad, 540 miles (900 kilometers) northeast of the capital Tehran, Iran, Wednesday, March 21, 2007. [AP]

Ayatollah Ali Khamenei also warned the United States that Iran would fight back with "all its capacities" if attacked.

"Until today, what we have done has been in accordance with international regulations," Khamenei said. "But if they take illegal actions, we too can take illegal actions and will do so."

He did not elaborate on what the "illegal actions" could be, but Iran is a signatory to the Nuclear Nonproliferation Treaty, the agreement under which the UN inspections are held.

Iran says it will never give up its right under the treaty to enrich uranium and produce nuclear fuel. But it has offered to provide guarantees that its nuclear program won't be diverted toward weapons - as the US and some of its allies fear.

The five permanent members of the Security Council - the United States, Russia, China, Britain and France - and Germany have drawn up new sanctions to punish Iran for rejecting UN demands to halt enrichment - a process that can produce fuel for a reactor or fissile material for a nuclear warhead.

"If they want to treat us with threats and enforcement of coercion and violence, undoubtedly they must know that the Iranian nation and authorities will use all their capacities to strike enemies that attack," Khamenei told the nation in an address marking the first day of Nowruz, or the Persian New Year.

Ambassadors from the 15 Security Council nations held informal discussions in New York on Wednesday ahead of a meeting to discuss possible changes to the draft sanctions resolution.

The new sanctions would ban Iranian arms exports and freeze the assets of 28 additional individuals and organizations involved in the country's nuclear and missile programs - about a third linked to Iran's Revolutionary Guard, an elite military corps.

The package also calls for voluntary restrictions on travel by the individuals subject to sanctions, on arms sales to Iran, and on new financial assistance or loans to the Iranian government.

In Washington, Bush administration officials urged patience with US efforts to crack down on Iran as Democrats leveled fresh criticism of the government's approach.

"Iran is a country very much on the defensive right now," said R. Nicholas Burns, undersecretary for political affairs at the State Department.

"The United States is committed to pursuing a diplomatic solution to the challenges posed by Iran. This will require patience and persistence," he told the Senate Banking Committee.

The US and France are hoping the new sanctions will be adopted by the end of the week, but that goal seemed complicated. South Africa, which holds the rotating Security Council presidency, has proposed extensive changes to the resolution - including eliminating the arms embargo - and a 90-day "time out" on all sanctions.

Although the five council powers remained united on their draft, discussion of South Africa's proposals seemed likely to delay a vote.

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