German Chancellor Angela Merkel said Monday the time was nearing for sanctions on Iran over its disputed nuclear program as Tehran has rejected Western efforts to find a negotiated solution.

Speaking to reporters after meeting Lebanese Prime Minister Saad Hariri, Merkel said: "I made clear that we are coming to the phase where there should be sanctions against Iran .

" Iran has not accepted the constructive offers we have made and has even rejected them," she added.

Merkel's comments came a day after French Foreign Minister Bernard Kouchner said the European Union was ready to impose unilateral sanctions as Western powers struggle to forge a consensus within the United Nations Security Council.

Germany is one of six powers negotiating with Iran over its nuclear program, together with permanent, veto-wielding Security Council members the U.S. , China , Russia , the U.K. and France.

China, which recently replaced Germany to become Iran's biggest trading partner as a big buyer of its oil, is seen as less keen on fresh sanctions, while Russia has also expressed misgivings.

The West suspects Iran of secretly trying to develop nuclear weapons, a charge rejected by Tehran , which says its atomic program is purely for civilian energy purposes.

In other remarks, Merkel sharply criticized Israel 's decision to build new settler homes in East Jerusalem , calling it a "serious step back" in efforts to forge peace in the Middle East .

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