Nuclear summit set for December: UN

International Atomic Energy Agency spokesman George Webb said the meeting would take place on December 13 with the aim of working out how to resolve "outstanding issues" which include restrictions on inspections at military sites.

The talks would be the first since early summer and would take place against a backdrop of worsening economic conditions in Iran.

US sanctions targeting its oil exports have had a devastating impact, cutting exports in half, devaluing the rial currency and sparking protests and criticism of President Mahmoud Ahmedinejad's handling of the economy.

Before the sanctions hit oil exports accounted for 80 per cent of the country's foreign currency revenues.

Further economic constraints are likely to be discussed in Washington in coming weeks.

The two US senators who first put forward the idea of oil sanctions are now trying to get even tougher proposals introduced via a forthcoming Defence Bill.

If successful they would target Iranian overseas assets and foreign imports.

Tehran acted today to ban imports of "luxury" products including expensive cars, coffee and toilet paper.

The restrictions aim to stem the flow of dollars out of the country and boost domestic production.

nIran hit back today at Pentagon claims it fired at a US drone over international airspace last week.

Defence Minister General Ahmad Vahidi said the unmanned device had been over Iranian territory at the time of the incident, while the Pentagon said it was 16 miles offshore.