The US is threatening severe financial penalties against any foreign companies or individuals that do business with the government agency that operates Iran's civilian nuclear programme, a move that could open new rifts among the US, Russia and Europe over how to deal with the nuclear threat posed by Iran.

President George W. Bush on Wednesday issued an executive order freezing all US assets of eight organisations in Iran, North Korea and Syria deemed to be involved in weapons proliferation, including the Iranian government's Atomic Energy Organisation of Iran (AEOI).