Russia pulled out of talks on tighter sanctions against Iran despite warnings yesterday that Tehran was racing towards producing a nuclear bomb.

The apparent failure of the diplomatic initiative leaves the West without a strategy to contain Iran's nuclear ambitions.

Moscow pulled out of multilateral talks planned for today on the sidelines of the United Nations General Assembly amid tensions with the United States over Russia's military action in Georgia.

Washington said that the meeting between the five permanent Security Council members and Germany had been cancelled. France, however, urged the remaining parties to go ahead with the discussions.

The negotiations took on greater urgency yesterday as the European Union cautioned that Iran was moving ever closer to the capacity to arm a warhead with a nuclear core, despite its continued insistence that its nuclear programme was a peaceful one in pursuit of civilian energy.

Britain, Germany and France called the findings of the report on Iran by the International Atomic Energy Agency “decidedly bleak”.

Tehran is continuing to enrich uranium in defiance of a UN ban, and UN inspectors are in despair at their inability to assess adequately its capabilities because of continued stonewalling.

“The report presents a decidedly bleak picture,” a statement said. “We now seem at a particularly critical juncture, with Iran now asserting there is nothing for the agency to investigate as far as possible military dimensions to its nuclear programme are concerned.”

The German Foreign Minister gave warning yesterday that the frosty state of US-Russian relations could imperil action on Iran for months to come and could further aggravate a range of pressing global problems that needed a multilateral approach.

Frank-Walter Steinmeier told reporters at the General Assembly that US-Russian co-operation was essential to bring pressure to bear on Tehran.

“I am very worried,” he said. “None of the international crises, from the Middle East to the Caucasus, Iran — we see it also in the six-party talks on North Korea — can be resolved if we do not have the two big players, Russia and the US, on board.”

He said that the decision by Washington to withdraw from a planned meeting of foreign ministers from the Group of Eight industrialised nations had prompted Russia to withdraw from talks today. “We're going in the wrong direction, I am completely convinced of that,” he said.

Diplomats from the six countries of the so-called 3+3 will meet instead of their foreign ministers. Mr Steinmeier said, however, that damage had already been done, with Tehran capitalising on the disunity of world powers.

“I see our common chance in being able to demonstrate the international community's decisiveness and unity to Iran,” he said. “That is difficult when we six are not speaking to each other. I see no more chance of that happening this week.”

Condoleezza Rice, the US Secretary of State, was preparing yesterday for what promised to be a tense encounter with her Russian counterpart, Sergei Lavrov, with whom she has clashed repeatedly even before the Georgian crisis.

“We are obviously in a rocky period in our relations with Russia,” a senior American official said.

David Miliband will meet Mr Lavrov today — their first encounter since their now infamous telephone conversation during which the Russian swore at the Foreign Secretary in a decidedly undiplomatic exchange.

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