The latest round of American sanctions are aimed at shutting down Iran's central bank, a senior US official said Thursday, spelling out that intention directly for the first time.

"We do mean to close down the Central Bank of Iran (CBI)," the official told reporters on condition of anonymity, while adding that the United States is moving quickly to implement the sanctions, signed into law last month.

The sanctions, broadly aimed at forcing Tehran to shift course on its nuclear program, targeted Iran's crucial oil sector and required foreign firms to make a choice between doing business with Iran or the United States.

Foreign central banks that deal with the Iranian central bank on oil transactions could also face similar restrictions under the new law, which has sparked fears of damage to US ties with nations like Russia and China.

"If a correspondent bank of a US bank wants to do business with us and they're doing business with CBI or other designated Iranian banks... then they're going to get in trouble with us," the US official said.

The measures were contained in a mammoth $662 billion defense bill, which President Barak Obama signed on December 31 at a time of rising tension with Tehran, which has threatened to block the Strait of Hormuz -- through which more than a third of the world's tanker-borne oil passes.

The United States has warned it will "not tolerate" such an interruption.

There are fears that increased sanctions on Iran's central bank could force the global price of oil to suddenly soar, and actually give Tehran a financial windfall on its existing oil sales.

Rising oil prices could also crimp the fragile economic recovery in the United States and inflict pain on American voters in gas stations -- at a time when Obama is running for reelection next year.

Iran's Larijani discusses nuclear issue with Turkey
Ankara (AFP) Jan 12, 2012 - Iranian parliament speaker Ali Larijani was holding talks with Turkish leaders Thursday on Tehran's controversial nuclear programme amid an international standoff between Tehran and world powers.

Larijani, a former nuclear negotiator, met with Foreign Minister Ahmet Davutoglu during a breakfast and parliament speaker Cemil Cicek but no statement was made to the press.

"We favour a settlement to the nuclear dispute through diplomatic means," foreign ministry spokesman Selcuk Unal told a weekly press conference.

The United States has ratcheted up pressure on Iran and is spearheading a campaign to squeeze its oil exports over its nuclear programme, which the West believes masks a drive to develop atomic weapons.

Iran insists the nuclear drive is exclusively for peaceful purposes.

The European Union is expected to announce further sanctions of its own, including an oil embargo, at the end of this month, while Japan said Thursday it was reducing its imports of Iranian oil.

Turkey has repeatedly said it is only bound by sanctions decided by the UN Security Council.

Iran provided about 40 percent of Turkey's oil needs in 2011. And its biggest refiner Tupras recently made a deal to purchase nine million tons of crude oil from Tehran, media reports said.

"We are not bound by any decision except for the UN decisions," Energy Minister Taner Yildiz said on Thursday.

"Tupras is continuing its imports ... and as of today there has been no change on our roadmap," regarding imports from Tehran, he added.

Larijani was due to meet President Abdullah Gul and Prime Minister Recep Tayyip Erdogan later in the day. He is expected to hold a press conference at 1800 GMT.

The talks over Iran's nuclear programme are expected to intensify in the coming days as Iran's Foreign Minister Ali Akbar Salehi will visit Turkey on January 19, said diplomatic sources.

Last week when Davutoglu was in Tehran, his Iranian counterpart Salehi said he would like to see a resumption of the nuclear talks with world powers last held in Istanbul a year ago.

Ministry spokesman Unal said no date or venue has been agreed yet for the start of the talks.

"If a demand or a request is conveyed to us in order to host (nuclear talks), we will consider it favourably," he added.

"What's important is to give a chance for diplomacy and to solve this problem through diplomatic means before the tensions escalate."