The European Union has banned new purchases of Iranian oil and frozen the assets of Iran's central bank as part of a Western campaign to pressure Tehran to suspend controversial parts of its nuclear program.

EU foreign ministers agreed to the new sanctions Monday in Brussels. Their decision allows member nations with existing contracts for Iranian oil to honor those purchases until July 1. The grace period is meant to help major buyers such as Greece, Spain and Italy find alternative sources of supply before the full ban takes effect.

Western powers accuse Iran of trying to develop nuclear weapons under cover of a civilian energy program, a charge Tehran denies.

The leaders of France, Germany and Britain urged Iran's leaders “immediately to suspend its sensitive nuclear activities,” saying they will “not accept Iran acquiring a nuclear weapon.”

In Washington, U.S. Secretary of State Hillary Clinton and Treasury Secretary Timothy Geithner said the moves are “another strong step” in the international effort to pressure Tehran to curb its nuclear ambitions.

Iran furiously denounced the decision. Lawmakers repeated threats to close the Strait of Hormuz, a vital pathway for global oil supplies. The deputy head of parliament's national security committee said any disruption to Iranian oil exports “definitely” will lead to the closure of the Strait.

Foreign Ministry spokesman Ramin Mehmanparast called the economic sanctions “illogical and unfair.” He said the world's long-term need for energy means it is “not possible to impose sanctions on Iran,” with its huge resources of oil and gas.

Another lawmaker predicted the embargo will have “no impact” on the Iranian economy because Iran will find other customers for its oil. Iran's economy is heavily reliant on revenue from oil exports. The EU has been the second largest market for Iranian oil after China.

The 27-nation European bloc also agreed to stop all trade in gold and other precious metals with Iranian state institutions. The EU and the United States have been tightening unilateral measures on Iran in recent weeks in response to Iranian moves to accelerate uranium enrichment.

The U.S. imposed sanctions Monday on Iran's third largest bank, making it harder for Tehran to access the world's financial system. The U.S. Treasury Department said Iran's Bank Tejarat is accused of aiding the country's nuclear weapons program, including moving tens of millions of dollars to help a state-run agency acquire uranium.

EU and U.S. sanctions have prompted a dramatic weakening in the value of Iran's currency, the rial. In black market trading on Monday, the rial dropped to a new record low of 20,500 to the dollar, a slump of more than 12-percent from last week.

Russian Foreign Minister Sergei Lavrov criticized the EU embargo Monday, saying unilateral sanctions will not help revive negotiations between Iran and six world powers on the Iranian nuclear program. Those talks have been on hold for a year, but Lavrov said he is hopeful they will resume soon.

Russia and China supported several rounds of U.N. Security Council sanctions on Iran but oppose further measures, saying all parties should focus on negotiations. Moscow and Beijing both have close economic ties to Tehran.