Tehran might bow to a blend of "credible" incentives and "threats of intensified international scrutiny and pressures" but "it is difficult to specify what such a combination might be," Blair told lawmakers.
His comments, in testimony to the Senate Armed Services Committee, came as US President Barack Obama wrestled with how to convince the Islamic republic from halting what the West views as a secret nuclear weapons drive.
Iran denies the allegations, saying it needs atomic power to generate electricity for civilian use.
"Although we do not know whether Iran currently intends to develop nuclear weapons, we assess Tehran at a minimum is keeping open the option to develop them," said Blair.
"We assess convincing the Iranian leadership to forego the eventual development of nuclear weapons will be difficult, given the linkage many within the leadership see between nuclear weapons and Iran's key national security and foreign policy objectives, and given Iran's considerable effort from at least the late 1980s to 2003 to develop such weapons," Blair warned.
US intelligence agencies estimate that Iran halted its nuclear weapons design and weaponization activities in late 2003 and that Tehran had not resumed them as of mid-2007, he told lawmakers.
"Iran does not currently have a nuclear weapon" because of difficulties in acquiring or producing the fissile material necessary, but could obtain enough as early as 2010, Blair said.
But the agencies cannot "rule out that Iran has acquired from abroad or will acquire in the future a nuclear weapon or enough fissile material for a weapon."
Iran will probably be technically capable of producing enough highly enriched uranium for a weapon at some point in the 2010-2015 timeframe, although the State Department's intelligence service sets the early date at 2013 "because of foreseeable technical and programmatic problems," he said.
