South Korean officials say they will soon open separate talks with the United States and Iran over U.S. requests that Seoul impose new economic sanctions on the Middle Eastern state.
South Korea feels trapped between its closest security ally and an important trading partner that provides 10 percent of its oil.
The United States wants Seoul to impose new sanctions on Iran, which it suspects of trying to develop nuclear weapons - a charge Iran denies. In particular, Washington wants action against Iran's Seoul-based Bank Mellat, which has been linked to Iranian nuclear activities.
But Iran says it will retaliate against any new sanctions, with potentially serious consequences for South Korea's economy.
Reuters news agency quoted an unidentified South Korean official on Friday saying Seoul will explain its concerns to the United States and seek to minimize the economic damage.
The United States and the European Union have already imposed sanctions on Iran that go beyond those agreed to by the U.N. Security Council.
Two senior U.S. officials - the State Department's special adviser for nonproliferation and arms control Robert Einhorn and the Treasury Department's deputy assistant secretary for terrorist financing and financial crimes, Daniel Glaser - were in South Korea and Japan at the beginning of this month to press those countries to follow suit. The officials are also expected to visit China.
South Korea has more than 28,000 U.S. troops on its soil to help defend it from North Korea, and the two are conducting a series of joint military exercises aimed at deterring North Korea. An international investigation found Pyongyang responsible for the sinking of a South Korean warship in March.
The United States and South Korea also have a major free-trade agreement pending in the U.S. Senate.
Some information for this report was provided by Reuters.