If the Iranians thought they could intimidate the British with their attack on its embassy, they have grossly miscalculated.

The blowback from the staged assault could very well mean a more united EU in approaching increased sanctions - including a ban on Iranian oil imports.

Reuters:

"From a political point of view this (attack) cannot, I think, work in the direction of EU member states wanting to ease pressure on Iran," one senior EU diplomat said. "On the contrary."

"The whole question is do we go further and add a new set of sanctions apart from those adopted in the past."

French Foreign Ministry spokesman Bernard Valero said that following the embassy attack, Paris would push foreign ministers in Brussels to look at sanctions beyond what had already been agreed, especially proposals made by President Nicolas Sarkozy to freeze the central bank's assets and to ban oil imports.

French sources say that Paris feels the attack has added to the already long list of factors playing against Tehran and those that have wavered will be more inclined to listen to the French proposals.

Britain plans to back the idea of banning Iranian oil imports to Europe, diplomats have said, but resistance elsewhere in the EU remains.

In the past week, some EU capitals have insisted it is too early to adopt the embargo and ban European companies from doing business with the central bank, concerned about the economic consequences of tighter restrictions on a big OPEC oil producer.

Greece is especially unhappy about the proposed ban on oil imports since they rely on Iranian oil and some generous financing terms that they couldn't get elsewhere.

But diplomats are saying that the EU may yet ban oil imports and that discussions will continue into next week before a final decision is made.

Also under consideration is recalling EU ambassadors. At a time when the Iranian economy is faltering, the nation's increasing isolation may undermine the regime's credibility even more with the majority of citizens.