(Reuters) - Faced with a Russian veto, Britain and the United States on Monday dropped for now a plan to revamp sanctions against Iraq and instead decided to extend the current U.N. humanitarian program without change. (Read photo caption below). Britain, which drafted the resolution on the new plan, told council members that in light of Russia's objections, the U.N. oil-for-food program should be extended for five months. It is circulating a draft to this effect for a vote on Tuesday, when the current phase of the program expires. The oil-for-food plan allows Baghdad to sell oil in order to buy a wide range of civilian supplies under U.N. control to ease the impact of the sanctions, imposed when Iraq invaded Kuwait in August 1990. The delay -- or perhaps indefinite postponement -- of the U.S.-British plan to overhaul the sanctions is a blow for both countries, which have attempted to plug holes in the embargo and at the same time ease the import of civilian goods to Iraq, which now go through cumbersome procedures. Russia, an ally of Iraq, has opposed the so-called ``smart sanctions'' from the start, saying they do not move the council closer to suspending the sanctions. Moscow's Foreign Minister in a letter to Secretary of State Colin Powell last week threatened to veto the plan if it were put to a vote. ANOTHER EXTENSION SET When the council failed to reach agreement on a draft resolution for a sanctions overhaul in June, the program was extended a month, until July 3. In effect, Tuesday's planned resolution gives Iraq a six-month extension, the usual practice in the oil-for-food program. Iraq on June 4 cut off oil sales supplies to the U.N. program to protest consideration of the U.S.-British proposals and threatened to do the same to Jordan and Turkey if they cooperated with the United States and Britain. Baghdad has said that it will resume exports under an unchanged oil-for-food program but that it would not restart shipments if talks on sanctions continued. Iraqi officials have not reacted to the new draft resolution. The new draft resolution, which could be revised by other council members, however, expresses the council's ``determination to agree a new system.'' It is nearly the same as one adopted last December on the oil-for-food program, but deletes any new proposals that would favor Iraq the council had been considering. British Ambassador Sir Jeremy Greenstock said he intended to move ahead with talks on the new sanctions plan, which is said the majority of council members supported. A 10-PAGE LIST In Washington, State Department spokesman Richard Boucher said the United States supported an extension. The extra time would allow efforts to get ``Russia on board'' and work out ``the rest of the elements of the resolution.'' China and France, also sympathetic to Iraq, had agreed to a key provision in the U.S.-British plan, a list of ``dual use'' goods that has to be reviewed by the council to make sure supplies cannot be used for military purposes. The original 23-page list submitted by the United States had been trimmed to 10 pages. Iraq as well as Russia argues that the new proposals strengthen the sanctions rather than move toward suspending them. It has promised Moscow new oil deals and threatened to cut off trade with France for its support of the new plan. Moscow has presented a rival resolution that would suspend the sanctions shortly after U.N. arms inspectors arrived back in Iraq and reimpose them if Baghdad failed to cooperate, a concept most council members reject. A key obstacle to suspending the sanctions is for inspectors to determine whether Baghdad still has any weapons of mass destruction. The inspectors have not been allowed to return to Iraq since they left the country in mid-December 1998, on the eve of a U.S.-British bombing raid.PHOTO CAPTION:Vladimir Zhirinovsky, Russian ultra-nationalist lawmaker, passes Monday July 2, 2001 by a portrait of president Saddam Hussein at the al-Rasheed hotel in Baghdad. Zhirinovsky said that Russia will use its UN veto to reject the US-backed "smart" sanctions on Iraq proposed by Britain. Man at rear is unidentified. (AP Photo/Jassim Mohammed)