South Korea said on Wednesday it would restrict the Seoul operations of Bank Mellat, an Iranian bank accused of facilitating Tehran's efforts to develop nuclear weapons.

'The government will restrict foreign exchange transactions of 102 institutions including Bank Mellat, and 24 individuals without the approval of the Bank of Korea,' a government statement said.

Washington has demanded Seoul adopt new sanctions on Iran in addition to US-authorised measures to punish Tehran for its uranium enrichment programme.

Tehran has said South Korea risks losing substantial economic benefits in Iran if it follows the US lead.-Reuters