Britain 's foreign secretary on Monday said Iran is already paying a price for the harder line taken under President Mahmoud Ahmadinejad, and he called for peaceful pressure to resolve a standoff over Iran 's nuclear weapons program.
"The truth is that the result of Iran putting itself beyond the pale of the international community has been a serious damage to investor confidence," Straw said in an interview on British Broadcasting Corp. radio.
"The Iranian Stock Exchange, which is actually quite busy normally, has declined significantly. There has been a flight of capital out of the country. And even more worryingly for the regime, the brightest and the best continue to leave the country in large numbers," Straw said.
"We want to see a normalization of relations with this country, and it is still not too late for the Iranians to get back into negotiations with us." Straw added.
He repeated his position that military force is not an option to solve the dispute.
"This is an issue that has to be resolved yes, by pressure but by peaceful and democratic means," Straw said.
Straw noted that Iran had signed up to the Nuclear Nonproliferation Treaty, unlike Pakistan , India and Israel "each of which have nuclear weapons, and we want them to end their nuclear weapons reliance."
The International Atomic Energy Agency last week referred the dispute to the U.N. Security Council, which could impose political and economic sanction. Iranian officials, however, have been adamant about pursuing what they see as their right to develop a nuclear program.
"We are not afraid of the Security Council. What is important for us is defending our legitimate rights. Iran is a powerful country and is able to defend its interests," Iranian Foreign Ministry spokesman Hamid Reza Asefi said on Sunday.
Straw was speaking later Monday to the International Institute for Strategic Studies on the British view of Iran , which he says is heading in the "wrong direction."
"We will not take sides in Iran 's internal political debates, those are for the Iranians to resolve," Straw says in extracts of the speech released by the Foreign Office.
"But this does not mean that we should stop standing up for the principles of human rights and fundamental freedoms which we hold dear to ourselves and which so many Iranians aspire to," Straw's speech said.
"Our message is that we want the Iranian people to enjoy the benefits of civil nuclear power and we support their aspirations for a freer, more democratic and prosperous Iran ", reports the AP.
First and foremost, it goes about the replacement of the French-Russian SaM146 engine with the Russian PD-8 aircraft engine