Speaking three days after Britain and five other key powers failed to agree on new sanctions, Miliband said it would be wrong to give a running commentary on what sanctions could be agreed.
But he told lawmakers: "We believe that financial sanctions… have an important role to play in exerting pressure at the appropriate points in the (Iranian) regime and not affecting the Iranian people."
World powers made up of the five permanent members of the UN Security Council plus Germany met in New York on Saturday but failed to reach an agreement about new sanctions.
The six are concerned about Tehran's rejection of a UN-brokered deal under which most of Iran's low enriched uranium (LEU) stockpile would be shipped abroad to be further enriched into reactor fuel.
Tehran has ignored a US-set December 31 deadline to accept the offer, drawn up by the UN International Atomic Energy Agency, and countered with its own proposal of a simultaneous and staged swap of LEU with reactor fuel.
