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UNITED NATIONS - The major powers moved closer to agreement Monday night on a modest package of new sanctions against Iran likely to include an embargo on Iranian arms exports and an asset freeze on more individuals and companies associated with Tehran's nuclear and missile programs.

A Russian technician walks inside the Reactor building of the Bushehr nuclear power plant, in southern Iran, February 2006. [AFP]

A new sanctions resolution is also likely to include a ban on government loans to Iran, council diplomats said. But a travel ban is out, and there will likely be no ban on arms imports or on export credit guarantees for companies doing business in Iran.

Ambassadors from the five veto-wielding permanent Security Council nations - the United States, Russia, China, Britain and France - and Germany emerged from a closed-door meeting far more optimistic than ever before but also cautious because of potential problems with every proposal in the package.

"This is the best meeting we have had since the beginning of these negotiations," said France's UN Ambassador Jean-Marc de La Sabliere. "We are now very close, and we have made today (much) progress."

Acting US Ambassador Alejandro Wolff said ambassadors would report to their capitals on the possible elements for a new resolution and wait to see if they're approved or if changes are needed.

In December, the Security Council voted unanimously to impose limited sanctions against Iran for its refusal to freeze uranium enrichment. The council warned it would adopt further nonmilitary sanctions if Iran refused to comply.

Possible new sanctions include a travel ban, an arms embargo, trade restrictions, and an expanded list of people and companies subject to an asset freeze.