DUBAI, May 29 (Reuters) - Iraq on Tuesday reinforced its threat to halt United Nations-supervised oil sales if the U.N. Security Council adopts the "smart sanctions" proposal of Britain and the United States.

"There is no forecasting in this. We are not bluffing," an Iraqi source told Reuters.

"Our position has been made very clear. If the renewal (of the U.N. oil sales deal) is carried out as normal -- with no extra conditions -- Iraq will continue pumping."

He declined to comment on whether Baghdad would keep exports rolling if the U.N. were to extend the current ninth phase of the six-month programme for a short period to allow deliberations to continue.

Washington's aim is to get the resolution adopted before the June 3 expiry of this tranche of the U.N. oil sales deal.

The scheme, which regulates sales from and goods going to Baghdad, was meant to ease the impact of sanctions imposed when Iraq invaded Kuwait in August 1990.

But with two permanent members of the Security Council, Russia and China, balking -- an extension of the current phase looks likely.

Iraq objects strenuously to attempts by London and Washington to connect elements of the oil-for-food deal with their smart sanctions proposal, sources in the region said.

"We have taken this new stand because the United States and Britain are connecting a normal, technical extension of the (oil-for-food) memorandum of understanding (MOU) with new conditions," the Iraqi source said.

The Anglo-American proposal seeks to ease restrictions on civilian imports while cracking down on Iraq's oil smuggling operation.

While most Iraqi oil exports go through the U.N. programme, industry sources say Baghdad has been smuggling up to 250,000 barrels per day to Turkey and Syria and about 100,000 bpd to Jordan.

Iraq has vowed to sever all trade ties, including oil sales, with any country that implemented proposed smart sanctions.

If a resolution is passed further down the road, Iraq may continue to export provided there is no direct linkage with the oil-for-food scheme, sources in the region said.

"If the resolution is not connected to the MOU, Iraq could ignore what it does not like and keep pumping," an analyst in the Iraqi capital said. "Baghdad didn't stop producing when the U.N. passed resolution 1284."