Iran's new offer of reprocessing low-enriched uranium abroad was rejected by Western powers, which termed it as a "delaying tactic" by the country to resolve its controversial nuclear issue.
Iranian Foreign Minister Manouchehr Mottaki said at the Munich Security Conference on Saturday that his country was ready for a compromise on the exchange of nuclear fuel if it alone decides the time plan and the quantity of uranium to be exported.
However, German Defence Minister Karl-Theodor zu Guttenberg criticised Mottaki's offer as a "delaying tactic."
With his offer, the Iranian foreign minister "wasted a chance" for an agreement and he is "again playing for time", zu Guttenberg said.
Speaking at the conference, he called upon the UN Security Council to impose further sanctions on Iran.
German Foreign Minister Guido Westerwelle described Mottaki's offer as a "trick" and said he is preparing the German business for new sanctions against Iran.
"I have informed the German business that we cannot avoid further sanctions against Iran," Westerwelle said in a newspaper interview.
As Iran is the largest trading partner in Europe, Germany's economy will be affected if much tougher sanctions were imposed, but the costs of a nuclear armament by Iran for the German economy and the whole world will be much higher, Westerwelle said.