Republican Senators Jon Kyl and John McCain, Independent Senator Joseph Lieberman, and Democratic Senator Evan Bayh urged Obama to prepare sanctions targeting the Central Bank of Iran in the event of diplomatic stalemate.
The lawmakers introduced legislation calling on the president to act if Iran does not accept his offer of direct talks before a late September summit of the Group of 20 or fails to freeze uranium enrichment and reprocessing activities 60 days after that.
"Whether one believes 'engaging' directly with the regime in Tehran will accomplish anything, there is no question that time is of the essence," said Kyl, the chamber's number two Republican.
"Every day that passes is time that the Iranians use to perfect a nuclear weapon and stockpile nuclear weapons material," said Kyl.
The measure, introduced as an amendment to an annual defense spending budget bill, warns of stricter US economic sanctions on Iran's government unless the UN Security Council toughens its own sanctions regime on the Islamic republic.
Lieberman said he supported Obama's offer of direct talks but warned that "the Iranians need to understand that this is a limited time offer."
Major world powers agreed at recent summit in Italy that they would assess Iran's nuclear cooperation at the G20, to be held in Pittsburgh, Pennsylvania, ahead of the United Nations General Assembly.
Iran, laboring under UN sanctions for refusing to freeze sensitive nuclear work, has rejected the West's charges that it seeks nuclear weapons under cover of a civilian atomic energy program.
Obama has said he wants a diplomatic solution to the standoff but has repeatedly warned that he has not ruled out the use of force.
"This amendment demonstrates that the regime must decide to change course, soon, or face severe sanctions for its continued defiance of the international community," said McCain.
And "if Iranian officials are unwilling to sit down at the table and negotiate, then Congress is prepared to authorize crippling economic sanctions," said Bayh.
