In a provision of the 2010 defense budget bill, lawmakers said they required Obama "no later than January 31, 2010, to deliver a report to Congress on US engagement" with Tehran.
The legislation also demanded that sanctions be levied against Iran if the Islamic republic does not "accept the offer of the United States to engage in diplomatic talks" and also if it fails "to suspend all enrichment-related and reprocessing activities" related to its nuclear ambitions.
The bill, which still needs Senate approval, also requires Secretary of Defense Robert Gates "to submit an annual report to Congress on the current and future military strategy of the Islamic Republic of Iran."
Democratic Senator Christopher Dodd said on Tuesday he was strongly in favor of ratcheting up the pressure on Tehran, and revealed he was crafting "comprehensive sanctions legislation" to be unveiled later this month.
"I am committed to ensuring that this Congress equips President Obama with all the tools he needs to confront the threats posed by Iran," he said.
The draft Senate bill aims to impose new sanctions on companies exporting refined petroleum products to Tehran, and other measures.
It also would expand existing legislation to cover financial institutions and businesses and extend sanctions to oil and gas pipelines, boost moves to freeze the assets of Iranians accused of weapons proliferation and tighten export controls to halt the illegal export of sensitive technology.
Iran and Britain, China, France, Germany, Russia and the United States are to meet again on October 19 for more discussions on Tehran's nuclear program after talks last week in Geneva, the first in 15 months.
The push to impose new sanctions follows revelations that Iran had a second, secret nuclear reactor under construction under a mountain near Qom, and reports that Tehran may be closer than originally feared to developing a nuclear weapon.
Tehran's insists its nuclear program is designed for purely peaceful purposes while the United States accuses Iran of a clandestine effort to build nuclear weapons.
