The United States on Tuesday circulated a draft resolution backed by veto-wielding powers to the United Nations Security Council that would impose new sanctions on Iran.

"The draft resolution would both build on existing UN sanctions on Iran and give them additional teeth, while also expanding the breadth and reach of UN sanctions on Iran by creating new categories of sanctions," U.S. Ambassador to the UN Susan Rice told reporters after a closed-door session of the 15-member Council.

The U.S.-sponsored resolution, which is meant to punish Tehran for its non-compliance with previous UN resolutions, has the support of the other four veto-wielding members of the Security Council -- Britain, France, China, Russia -- and Germany, known as the P5 plus One. The group has been engaged in a series of meetings since last year, trying to find a consensus on how to respond to Iran's nuclear issue.

"The draft is clear evidence of the grave concern of the international community," French Ambassador to the UN Gerard Araud told reporters.

Tougher than previous resolutions, the draft proposal imposes broad-based sanctions targeting a wide range of pressure points associated with Iran's nuclear and proliferation activities, including new expectations on Iran to comply with its obligations under the International Atomic Energy Agency (IAEA), the UN atomic watchdog.

"It's purpose is to make it more difficult for Iran to acquire a nuclear weapons capability and also to persuade Iran to engage with the international community on their concerns about the nuclear program," British Ambassador to the UN Mark Lyall Grant said. "The text that has been presented today is a balanced text. It covers both the engagement track and the pressure track."

Indeed, the resolution does not mean "the door for diplomacy is closed," Chinese Ambassador to the UN Li Baodong told reporters. " We believe that dialogue, diplomacy, and negotiations are the best ways to address the Iranian issue."

Russian Ambassador to the UN Vitaly Churkin praised the draft resolution, saying it will not create "any problems for the normal economic relations of Iran with various countries."

"It is not supposed to cause humanitarian damage for Iran," he added.

But for the first time, in preambler language, the draft proposal "alerts states to the potential link between Iran's energy sector revenues and energy related technologies and proliferation," said Rice.

The draft resolution also imposes binding new restrictions on Iran's import of conventional arms. States would be prohibited from selling to Iran eight categories of heavy weapons, including battle tanks, attack helicopters, and missile systems.

To enforce compliance, the resolution would impose a mechanism for cargo inspections on banned materials. This is similar to the relatively successful Security Council resolution imposed last year on the Democratic People's Republic of Korea (DPRK), which chose to turn back one of its ships rather than to be seized and inspected.

The draft resolution also establishes a UN panel of experts to help monitor and enforce sanctions implementation and will include an annex of specific individuals, including from Iran's Revolutionary Guard Corps, and entities that will be subject to asset freezes and travel bans.

The annex remains a work in progress, said Rice, and negotiations will continue at the expert and diplomatic level.

"I can't say how long that process will be," said Grant, who admitted it would give time for Iran to move forward with its nuclear agreement with Turkey and Brazil.

On Monday, Iran agreed to turn over half its enriched uranium stockpile to Turkey in exchange for 20 percent-enriched nuclear fuel to run a reactor for medical purposes. However, Iran has said it will continue to enrich uranium to 20 percent moving Tehran much closer to possessing weapons-grade material.

"Any confidence building value of the Tehran research reactor deal is diminished, not only by the time that has elapsed but substantially by Iran's insistence that it will continue to enrich at 20 percent with or without a Tehran research reactor," Rice said.

Iran must send a letter to the IAEA within one week to declare its acceptance of the swap deal and provide details.

Churkin said he looked forward to seeing the letter from Iran, which would lead to "positive momentum."

Brazil's President Luiz Inacio Lula da Silva has touted the nuclear pact, proclaiming that diplomacy has emerged victorious, according to media reports.

Brazil's top UN envoy told reporters here that Brasilia is not going to debate a draft UN sanctions resolution against Iran.

"We should seize this opportunity for dialogue," Maria Luiza Ribeiro Viotti told reporters, while the Council went into recess due to technical problems with translation devices.

Meanwhile, a low-level Turkish diplomat called the proposal, " elements," as opposed to a "draft resolution," underscoring a degree of reluctance to move forward with sanctions.