The European Union tightened trade sanctions against Iran on Friday to punish Teheran for not committing to a long-standing demand of the international community that it freeze its uranium enrichment program. The new EU restrictions go slightly beyond existing UN trade sanctions and are designed to deny public loans or export credits to companies trading with Iran. France, which holds the rotating EU presidency, said European governments would also carefully watch financial groups doing business with Iranian banks and step up checks on ships and airplanes traveling to Iran. "This resolution expands the range of restrictive measures adopted by the UN Security Council," in December 2006 and March 2007, an EU statement said. The EU called on member nations to "show restraint when granting new public loans for trade with Iran... (and) to also be vigilant on activities taken by financial institutions with banks based in Iran." Senior Israeli diplomatic officials termed the EU decision a "positive development," and praised the EU for taking action and not letting the Iranians defy the latest deadline without facing immediate consequences. "We always say there is a need to tighten the sanctions," one senior official said. "And the fact that they acted immediately when the Iranians did not respond positively, shows that this is a step in the right direction." Earlier this week, France and the US said Iran's response to an international effort to defuse a dispute over its nuclear program had been insufficient. They said Iran had skirted the central question of whether it was ready to halt uranium enrichment, which western nations see providing Teheran with nuclear weapons capability. The new sanctions expand existing limits on trade with Iran beyond the UN Security Council's three sets of limited sanctions, which monitor trade and banking. But they do not go as far as the sanctions on Iran's oil and gas trade that EU ministers had threatened in June. The European Commission separately has begun implementing the third round of UN sanctions, agreed on in March. The sanctions include refusing EU visas to some Iranian officials and freezing the assets of people or companies involved in the nuclear program. It also forbids European companies from selling some products that could help Iran build atomic weapons. On top of that, EU countries will now inspect airplanes and ships traveling to and from Iran if they have reason to believe that they are carrying contraband goods. France said they would focus on Iran Air Cargo and the Islamic Republic of Iran Shipping Line. European governments will also monitor banks dealing with Bank Saderat, an Iranian bank with purported links to suspect Iranian nuclear activities. Britain, the US and others want to go further with their own sanctions targeting oil and gas that could badly hit Iran's already fragile economy - and that would not be backed by UN Security Council members China or Russia. Oil-rich Iran draws 80 percent of its revenues from energy exports and is already suffering high inflation and rampant unemployment. The EU is Iran's biggest trading partner with two-way trade totaling $39 billion in 2006. The UN Security Council's five permanent members and Germany have tried to entice Iran into suspending uranium enrichment by offering a package of economic, technological and political incentives. Iran said Tuesday it would only give a clear response to this offer when it gets a direct response on questions it has about the incentives. The US and others accuse Iran of trying to develop nuclear weapons under cover of a civilian atomic energy program. Iran denies the charge, insisting its program is peaceful, but it has thus far refused to halt enriching uranium, a process that can produce the ingredients for a bomb.