"This administration has demonstrated that it is committed to a diplomatic resolution of the international community's issues with Iran," said Treasury Undersecretary Stuart Levey told the Senate Banking Committee.
"The world is now united in looking to Iran for a response. If Iran does not live up to its obligations in this process, it alone will bear the responsibility for that outcome," Levey said.
"Under these circumstances, the United States would be obliged to turn to strengthened sanctions," he said.
As undersecretary for terrorism and financial intelligence, Levey oversees the department's efforts to staunch the flow of funds to international terrorists and weapons of mass destruction proliferators.
"We are intensifying work with our allies and other partners to ensure that, if we must go down this path, we will do so with as much international support as possible," he said.
"We will now wait to see whether Iran follows its constructive words with concrete action. If it does not, and if the president determines that additional measures are necessary, we will be ready to take action, ideally with our international partners."
Saying he was not in a position to provide details of the Treasury Department's plans, Levey would say only that it has completed work on them.
He said the sanctions already in place were bearing fruit, and Iran presents certain "economic vulnerabilities" on which the United States could apply pressure.
"We will need to impose measures simultaneously in many different forms in order to be effective," he said.
Iran held nuclear talks last week with world powers, although officials said it was too early to predict the outcome of those negotiations.
The Islamic Republic is to hold more talks on October 19 with officials from Britain, China, France, Germany, Russia and the United States on October 19.
