JERUSALEM, June 9 (Reuters) - The United States told Israel it plans to tighten economic sanctions on Iran and assess their impact at year-end, a top Israeli official said on Saturday in comments that appeared to play down military options for now.

Washington has stepped up commercial pressure on Tehran since the United Nations in December imposed sanctions over Iran's refusal to suspend activities the West fears are aimed at making atomic weapons.

Iran says its nuclear programme has purely civilian, not military, aims.

"Sanctions are the best way to act against Iran," Deputy Israeli Prime Minister Shaul Mofaz told Israel Radio after talks in Washington with top Bush administration officials.

"Regarding a timeline,... we decided that the end of 2007 will be the point of assessing the effectiveness of the sanctions and the amount of influence they are having on the Iranians," Mofaz said.

He did not say what other options, if any, would be considered at that point.

U.S. President George W. Bush has made clear Washington is sticking to a diplomatic course, Secretary of State Condoleezza Rice said earlier this month.

Mofaz said the United States and Israel agreed that additional sanctions would be imposed on Iran in two stages. The first stage would be stepped up U.N. Security Council sanctions.

The United States has been urging the five other powers spearheading efforts to persuade Iran to abandon uranium enrichment -- Germany, France, Britain, Russia and China -- to get to work on a new U.N. sanctions resolution.

"If the sharpening of the sanctions is not accepted by the Security Council, then the United States will lead its own measures, together with other countries, to place economic and financial sanctions, and not renew Iranian oil infrastructure," Mofaz said.

The Group of Eight industrialised nations said in a joint statement this week that it would back "further measures" against Iran if it does not comply with U.N. demands that it suspend its enrichment programme.

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