The resolution, adopted by the 15-member Council with 14 affirmative votes with Indonesia abstaining, for the first time bans trade with Iran in goods which have use in both civilian and military nuclear programmes.

It also authorizes inspection of shipments to and from Iran by sea and air suspected to be carrying prohibited materials.

Some Middle Eastern diplomats feared that it could set the stage for confrontation between Iran and the Western powers which reject Tehran's contention that its nuclear programme is purely aimed at peaceful uses, especially for producing power, and believe that it is geared towards making nuclear weapons.

Immediately after the vote, British Ambassador John Sawers read out a statement on behalf of the five permanent members and Germany which once again offered incentives as sop to Iran to stop its uranium enrichment programme.

They, he said, wanted European Union's foreign policy Chief Javier Solana to meet with Iran's chief nuclear negotiator Saeed Jalili in an effort to reopen the negotiations to resolve the issue by beefing up incentives offered to Tehran as far back as in 2006 provided it suspends its uranium enrichment plans.

Sawers did not elaborate what the new incentive would be but said they prepared to further develop the proposal presented to Iran and offer "substantial opportunities for political, security and economic benefits to Iran and to the region."

Iran says it wants to enrich uranium to ensure a assured supply for its nuclear power plants but West has offered to supply the fuel if it stopped enriching uranium. However, Tehran fears that the West might stop the supply at any time.

The resolution also freezes assets of about dozen companies and an equal number of individuals with links to the country's nuclear and ballistic missile programmes and calls for close monitoring of the Iran's main financial institutions.