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U.S. nears sanctions for Iranian nukes

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Efforts by the Obama administration to reach out to Iran have not produced a deal to halt Tehran's apparent pursuit of nuclear weapons, Secretary of State Hillary Rodham Clinton said Monday, and the U.S. now appears closer to moving forward with potentially crippling new sanctions.

"I don't think anyone can doubt that our outreach has produced very little in terms of any kind of a positive response from the Iranians," Mrs. Clinton told reporters before a speech on human rights that also criticized Iran. "Certainly, additional pressure is going to be called for."

Mrs. Clinton was the latest senior U.S. official to signal that more sanctions could be imposed early next year. President Obama has set a year-end deadline to see whether his strategy of diplomatic outreach can persuade the Iranians to curb a program that could give them the capability to produce nuclear weapons.

Defense Secretary Robert M. Gates predicted Friday that "significant additional sanctions" were looming, while the White House issued a stern statement the same day saying "there will be consequences" to Iranian inaction.

Mr. Obama added pointed language to his Nobel Peace Prize acceptance speech in Oslo, signaling that he expects the rest of the world to join the U.S.

Richard Fontaine, a senior fellow at the Center for a New American Security, said: "My sense is that it's going to come to a head. If we get to the end of the year and nothing unexpected happens on the Iranian side, the administration is left with very few options."

U.S. officials have stressed that the door remains open, but infighting in Tehran and the regime's preoccupation with containing domestic opposition after a disputed presidential election appears to have reduced the chances for a deal.

Iranian Foreign Minister Manouchehr Mottaki said over the weekend that Iran would be willing to trade some of its partially processed uranium for fuel for a reactor that produces medical isotopes. The offer did not satisfy Western concerns about Iran's potential to make nuclear weapons. Iran, which denies it wants to make nuclear weapons, has declined to return to multilateral talks about its program.

The tougher language out of the White House is being matched with preparations on Capitol Hill and internationally to further restrict Iran's commercial trade, banks and shipping.

The United States has barred most U.S. trade with and investment in Iran since the Clinton administration. Under the George W. Bush administration, it targeted Iranian banks. The House is expected to vote Tuesday on legislation granting the president authority to punish foreign individuals and companies that sell or ship gasoline to Iran.

The administration also has been discussing with envoys from France and Britain a fourth resolution tightening existing U.N. sanctions on Iran. Such a measure will require at a minimum the acquiescence of China and Russia, which have veto power on the U.N. Security Council and have been reluctant to jeopardize their commercial ties with Iran.

Kenneth Katzman, a specialist on Iran at the Congressional Research Service, said the United Nations "may go in the same direction" as the U.S., with "travel bans and asset freezes on some of the same people" already sanctioned by the U.S. Treasury Department. He said the main emphasis probably would be on making it more difficult for Iran's shipping companies to obtain insurance for their cargo.

Matthew Levitt, a former Treasury official now at the Washington Institute for Near East Policy, said the Obama administration also might use a little-known 2007 executive order that targets kleptocrats to go after Revolutionary Guards and other Iranian officials involved in corrupt front companies.

This would have the benefit of helping the Iranian opposition, he said. It's "a way to play on the further delegitimization of the regime."

In concert with the U.N. effort, the Obama administration is working closely with the European Union ahead of a vote at the end of January on EU trade with Iran. Despite statements from European governments, Iran still enjoys robust commerce, in particular, with Germany, which had a net increase in trade with Iran between 2008 and 2009.

Last week, the EU issued a draft statement setting a seven-week deadline for Iran to return to negotiations over its nuclear ambitions or face harsh sanctions.

The Obama administration also is looking to develop sanctions in collaboration with South Korea, Australia, the United Arab Emirates and Saudi Arabia. A recent meeting at the U.S. Treasury Department with representatives from these nations and others discussed new sanctions on Iran's banks, its commercial shipping, companies that insure that shipping, its oil and gas sector as well as commercial trade.

Mr. Katzman said the U.S. is poised to put pressure on foreign companies doing business with firms that are fronts for the Revolutionary Guards. Newsweek reported this week that Stuart Levey, Treasury Department undersecretary for terrorism and financial intelligence, plans to expose dozens of such front companies to make them easier to target.

Iranian dissidents, such as the filmmaker Mohsen Makhmalbaf, have urged that sanctions be targeted against the Guards, who have increased their power and influence in the government in recent years and have been at the forefront of repressing protests since Iran's disputed June 12 presidential election.

Mr. Obama's Oslo speech put a firm stamp on the idea that tough measures against proliferation would be consistent with the philosophy he voiced throughout his campaign and in his inaugural address - that the U.S. will extend a hand to nations that unclench their fists.

"Sanctions must exact a real price. Intransigence must be met with increased pressure - and such pressure exists only when the world stands together as one," Mr. Obama said.

"Those who claim to respect international law cannot avert their eyes when those laws are flouted. Those who care for their own security cannot ignore the danger of an arms race in the Middle East or East Asia. Those who seek peace cannot stand idly by as nations arm themselves for nuclear war," he said.

The possible need for more sanctions against Iran has been an element in Mr. Obama's diplomacy with Russia and China. Whether those efforts succeeded remains unclear. Russian President Dmitry Medvedev has signaled some support for the concept, but Prime Minister Vladimir Putin has been unenthusiastic about sanctions.

While in China in November, Mr. Obama told reporters that he and Chinese President Hu Jintao were unified. But Mr. Hu's language during the same news briefing in Beijing was more opaque.

"We both stressed that to uphold the international nuclear nonproliferation regime and to appropriately resolve the Iranian nuclear issue through dialogue and negotiations is very important to stability in the Middle East and in the Gulf region," the Chinese leader said.

Barbara Slavin contributed to this report.

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