Israel and Britain have hailed the European Union for moving in the right direction after a new sanction on Iran was agreed.

The EU agreed on Monday morning to impose an oil embargo on Iran – one part of its wider challenge to Iran's nuclear programme.

The decision was praised by Israeli Prime Minister Benjamin Netanyahu, who told Likud members at a Knesset session that it was a step in the right direction

"For now, it is impossible to know what the result of these sanctions will be," he added. "Heavy and swift pressure is needed on Iran and the sanctions must be evaluated according to their results."

The embargo was also welcomed by British Foreign Secretary William Hague, who said the decision demonstrated the EU's concern about Iran's nuclear ambitions and its determination to "increase peaceful, legitimate pressure on Iran to return to negotiations".

He said the sanctions were necessary because Iran was resolute on its "path of provocation".

"This is an enrichment programme that has no plausible civilian use, in a site that the Iranian authorities hoped to keep secret.

"Iran has it in its power to end sanctions by changing course and addressing the concerns of the international community. We are ready to talk at any point if Iran puts aside its preconditions."

In response to the embargo agreement, Iranian minister Mohammad Kossari vowed that "if any disruption happens regarding the sale of Iranian oil, the Strait of Hormuz will definitely be closed". The strait is the entry point to the Gulf area and its closure could cause a significant rise in oil prices.