NEW YORK - The United States and its allies Britain and Canada announced new sanctions against Iran Monday, in the wake of a report by the International Atomic Energy Agency (IAEA) that expressed concern over Tehran's controversial nuclear program.

US Secretary of State Hillary Clinton announced in Washington that President Barack Obama has signed an executive order that for the first time specifically targets Iran's petrochemical industry, and also expanded sanctions on Iran's oil and gas business.

Alongside Clinton, US Treasury Secretary Timothy Geithner warned the financial institutions around the world of the serious risks of "doing business with Iran."

Clinton described the new sanctions as "a significant ratcheting up of pressure on Iran, its sources of income and its illegal activities."

Britain on Monday severed all links with Iranian banks as part of the country's new financial sanctions against Tehran.

From 1500 GMT Monday, all Britain credit and financial institutions are required to cease business relationships and transactions with all Iranian banks, including the Central Bank of Iran, and their branches and subsidiaries.

This is the first time for Britain to cut off an entire country 's banking sector from its financial business.

According to a statement from the British Treasury, Iranian banks played a crucial role in providing financial services to individuals and entities within Iran's nuclear and ballistic missile programs.

Canada's new sanctions against Iran, announced by Foreign Affairs Minister John Baird, prohibit financial transactions with Iran, subject to certain exceptions; expand the list of prohibited goods to include all goods used in the petrochemical, oil and gas industry in Iran; amend the list of prohibited goods to include additional items that could be used in Iran's nuclear program.

Canada also added new individuals and entities to the list of designated persons under sanctions, and remove certain entities that no longer present a proliferation concern.

The IAEA resolution, adopted in Vienna on Friday, expressed " deep and increasing concern" over Iran's nuclear program, and called on Iran to engage "seriously and without preconditions" in talks aimed at restoring international confidence in the exclusively peaceful nature of the country's nuclear program.

Iran has always insisted on the peaceful nature of its nuclear program. Esmaeil Kosari, vice-chairman of Iran's Majlis (parliament) National Security and Foreign Policy Commission, said on Saturday that the new resolution will not impede Tehran's progress in civilian nuclear program.

Commenting on the new sanctions, Obama said that Iran had "chosen the path of international isolation."

"As long as Iran continues down this dangerous path, the United States will continue to find ways, both in concert with our partners and through our own actions, to isolate and increase the pressure upon the Iranian regime," Obama said in a written statement.

Analysts, however, believe that Washington's choices on the Iranian nuclear issue are limited given the gloomy global economy and its numerous domestic issues.

As China's envoy to the UN and other international organizations in Vienna Cheng Jingye has rightfully pointed out, sanctions or even military actions will not solve the problem but only threaten to complicate the situation.