Russian President Dmitry Medvedev says Iran is "moving closer" to having the potential to create nuclear weapons.

It is one of the first times Moscow has publicly recognised that Iran might be moving towards a nuclear weapon.

Russia, which has strong economic and military ties with Iran, has traditionally been an ally of Tehran.

But it has recently adopted a tougher stance towards Tehran's nuclear drive, and backed the fourth round of UN sanctions that was imposed last month.

"Iran is moving closer to possessing the potential which in principle could be used for the creation of nuclear weapons," Mr Medvedev told a meeting of ambassadors in Moscow.

The US and major European Union powers suspect that Iran is trying to build nuclear weapons. Iran says its nuclear programme is peaceful.

On 10 June, the UN Security Council endorsed a fourth round of sanctions on Iran, including tighter financial curbs and an expanded arms embargo.

Since then, the US and EU have unilaterally imposed additional sanctions, including a ban on investment in Iran's oil and gas industry, as well as trade with key banks and individuals.

Iranian President Mahmoud Ahmadinejad has dismissed the vote and rejected calls to halt uranium enrichment - which could have military as well as civilian uses.