VIENNA, Austria – A senior U.S. official challenged Iran’s hard-line president yesterday over his claim that Iranians are immune from further U.N. sanctions, saying such action is in the works unless Tehran meets demands to curb its nuclear program.

Iranian President Mahmoud Ahmadinejad delivered his own warning in Tehran, saying his government would make unspecified economic retaliation against any European country that followed the U.S. lead in imposing sanctions on some Iranian banks and businesses.

A Saudi Arabian official, meanwhile, said Arab states in the Persian Gulf had proposed to Tehran that they set up a consortium to provide Iran with enriched uranium as way to defuse the nuclear fight.

U.S. Undersecretary of State Nicholas Burns made his comment after a meeting with the head of the United Nations’ nuclear watchdog agency that was meant to demonstrate unity following recent strains on how best to deal with Iran’s defiance.

Burns stopped to talk with Mohamed ElBaradei at the International Atomic Energy Agency’s headquarters before heading to London, where he was to discuss the Iran standoff with his counterparts from Russia, China, Britain, France and Germany.