Iran reiterated it would not bow to UN Security Council demands to suspend uranium enrichment.

Iranian chief nuclear negotiator Ali Larijani will hold talks in Madrid with EU foreign policy chief Javier Solana on the dispute that has already seen Iran hit twice with UN sanctions.

Foreign ministers of the Group of Eight leading industrialized nations, meeting in Germany on Wednesday, expressed "deep regret" Iran had carried on expanding enrichment activities and suggested more sanctions could be imposed.

"If Iran continues to ignore demands of the Security Council, we will support further appropriate measures as agreed in Resolution 1747," the foreign ministers said in a statement.

Security Council resolution 1747 gave Tehran a 60-day deadline to freeze all enrichment, a process of purifying uranium for power plants or weapons. Iran ignored the deadline, which expired last week.