The unprecedented EU measures are the latest to be imposed upon Iran, in addition to four rounds of sanctions from the United Nations Security Council and a raft of American measures.
Iran says it will not slow or suspend any part of its nuclear program when under pressure. Few expect sanctions alone to prompt Iran to capitulate on its nuclear program, which Tehran says is for producing nuclear energy, not bombs.
"There is a genuine fear here that once the West senses weakness, it won't stop at the nuclear dossier," says the Iranian analyst. "The threat of regime change is also increasing.... I think the Iranians think: 'Well, if I was in their [Western] shoes, why stop here?'"
American and Israeli intelligence, along with inspectors of the UN's International Atomic Energy Agency, conclude that Iran has conducted weapons-related work in the past, but say they have no evidence that Iran has decided to make a nuclear device.
Iran and world powers are considering resuming nuclear talks that broke off a year ago in Istanbul, but neither an agenda nor dates have been agreed.
"I want the pressure of these sanctions to result in negotiations," EU foreign policy chief Catherine Ashton said. "I want to see Iran come back to the table and either pick up all the ideas that we left on the table ... last year ... or to come forward with its own ideas."
A senior Iranian politician said today that Iran should fight EU pressure by immediately closing off its oil taps to Europe, to disrupt European efforts to find alternatives.