A proposal to impose an oil embargo met with opposition at a gathering of European Union foreign ministers Thursday, but the group ended up imposing sanctions on 180 Iranian people and companies.
Some EU ministers at the meeting in Brussels argued strongly for an embargo, saying it would deprive Iran of the money it needs to develop a nuclear weapons program.
Iran has long insisted that its nuclear program is designed only to produce nuclear power.
But the French minister said Greece objected to the embargo as it relies on Iranian oil.
Instead, ministers voted to impose sanctions on 37 individuals and 143 companies or organizations. The measures include travel bans to EU countries and a freeze on assets held in EU nations.
They also voted to put further sanctions on a number of Syrian individuals and businesses to protest that country's ongoing violent crackdown on dissidents. British Foreign Secretary William Hague accused Iran of supporting the violence in Syria.
Iran has also drawn considerable worldwide condemnation for failing to protect the British Embassy in Tehran from an attack Tuesday by angry mobs. That attack featured prominently on the EU ministers' agenda.
Britain has already closed the embassy, and it ordered Iran's mission in London shut down and all of its staff sent home after the attack.
It's believed the attack could not have taken place without the consent of Iranian authorities, the CBC's Ann MacMillan reported from London.
"If Britain's foreign minister has anything to do with it, today's meeting will lead to more sanctions against Iran," she said before the meeting got underway.
After the attacks on the British Embassy, Germany, France and the Netherlands have recalled their ambassadors, and the British foreign minister would like to see EU countries follow, along with Canada and the U.S.
Israel 'might be forced' into war with Iran
Israel's defence minister says Israel has no desire to go to war with Iran over its nuclear program, but warns that at some point there may be no other option.
Ehud Barak says Israel "would be very glad" if sanctions and diplomacy would lead Iran to abandon its suspected nuclear weapons program but that he doesn't think that will happen.
Barak told Israel Radio on Thursday that Israel doesn't wish to fight unnecessary wars, but "definitely we might be forced" to act.
Israel, like the West, is convinced Iran is developing a nuclear bomb. It fears a nuclear-armed Iran could lead to Israel's destruction.
— The Associated Press
Iran's Foreign Ministry has criticized Britain's move, calling it a hasty knee-jerk reaction.
Iran releases 11 prisoners
Earlier Thursday, Iran released 11 hardline protesters detained for storming the British Embassy and diplomatic compounds in Tehran this week, the semi-official Fars news agency said.
Fars said 11 people, described as students, were set free late on Wednesday, a day after they were arrested for storming and ransacking the embassy and British diplomatic compounds in Tehran.
There was no immediate explanation for the release. Under Iranian law, damaging property carries a prison term of up to three years. It could, however, indicate the 11 have high-level protection from circles within the Iranian establishment.
The storming of the compounds was preceded by an apparently state-approved rally outside the British Embassy to denounce Britain's support for the latest round of U.S. sanctions on Iran over its controversial nuclear program.