"The clock has begun to tick," said John Bolton, the US ambassador to the United Nations, after Resolution 1696 was passed on Monday, giving Iran until August 31 to halt sensitive nuclear work.

If International Atomic Energy Agency director Mohammed ElBaradei then says that Iran has flouted the order, the council can start debating economic and political sanctions.

"The ball is now clearly in Iran's court. The choice is up to them," added Bolton.

While Iran's UN representative angrily rebuffed the resolution as "destructive and totally unwarranted", not all Security Council members took this as an immediate rejection.

But the unity shown by the Security Council in setting the August 31 deadline has given the United States hope that the unofficial coalition will remain strong if a sanctions threat has to be carried out.

Russia and China fought strongly to make sure there was no mention of sanctions but after two weeks of talks gave their backing to Resolution 1696 -- which says that punitive measures could be taken under Article 41, Chapter 7 of the UN Charter.

"I am quite confident that if this continues and if August 31 there is not a positive answer, then we'll be able to come to agreement on a next resolution under Article 41," said US Secretary of State Condoleezza Rice as she welcomed the Security Council move.

"I'm also confident that we have very good cooperation with Russia and China on this issue," she added.

"I think this is a record of moving steadily ahead and I'm quite confident that when the time comes to the next step, we'll move ahead again."