Iran calls new US sanctions 'psychological war'

TEHRAN, Iran -- Iran on Tuesday dismissed the new U.S. sanctions, saying they are part of a "psychological war" meant to sow discontent among Iranians and insisting the measures would not halt the country's nuclear program.

Washington ordered the new penalties on Monday, giving U.S. banks additional powers to freeze assets linked to the Iranian government and close loopholes that officials say Iran has used to move money despite earlier restrictions imposed by the U.S. and Europe.

The United States and its allies suspect Iran's nuclear program is geared toward producing an atomic bomb. Iran denies the charge, insisting its uranium enrichment program is only for peaceful purposes.

Rejecting the latest sanctions, Iranian Foreign Ministry spokesman Ramin Mehmanparast said Iran's central bank has no financial transactions with the United States and would not be affected.

"Many of these (U.S.) activities are in the sphere of psychological war and propaganda, and they cannot affect our work," he told reporters in Tehran on Tuesday

"When they impose sanctions on our central bank even though we have no transactions with them, it shows ... they think they are able to put pressure on our people. create concerns and social discontent," he added.

The new, stricter sanctions, authorized in legislation that President Barack Obama signed in December, will be enforced under an order he signed Sunday. The measures target Iran's Central Bank and its other financial institutions and are aimed at complicating the country's ability to conduct international commerce.

Iranian Vice President, Mohammad Reza Rahimi pledged, "Iran will make the sanctions ineffective as it did in the past, and it will continue selling oil," the official IRNA news agency reported Tuesday.

At the same time, Iranian lawmakers are pushing ahead with a bill to cut off oil sales to Europe before a punitive EU embargo goes into effect.

The U.S. and Europe want to deprive Iran of the oil income it needs to run its government and pay for the nuclear program, but many experts believe Iran will be able to find other buyers outside Europe.

Mehmanparast insisted the penalties will have no effect and would not halt Iran's nuclear program.

"When you apply the highest level of your power to impose sanctions on a nation and that nation continues on its path decisively, it proves you do not have enough power to halt it," he said, addressing the U.S.

Iran has acknowledged its labs have enriched uranium up to 20 percent. That's a significantly higher concentration than the nation's main stockpile, and it can be turned into weapons-grade material more quickly than the lower enriched uranium.

In Vienna, diplomats said Iran recently doubled its capacity for 20 percent enrichment by hooking up two more series of centrifuges at its Fordo facility, which is deep underground in a mountainside south of Tehran and possibly safe from air strikes.

The diplomats, who are accredited to the U.N.'s International Atomic Energy Agency, asked for anonymity because their information was confidential.

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Associated Press writer George Jahn in Vienna contributed to this report.