The United States is ready to slap fresh sanctions on Iran in the event international negotiations over its suspected nuclear weapons program fail, a senior US Treasury Department official said Tuesday.

"This administration has demonstrated that it is committed to a diplomatic resolution of the international community's issues with Iran," Treasury Under Secretary 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," he said.

"Under these circumstances, the United States would be obliged to turn to strengthened sanctions," said Levey, who oversees the department's efforts to staunch the flow of funds to international terrorists and halt weapons proliferation.

"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," said Levey.

"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."

Levey told lawmakers he was not in a position to provide details of the planned sanctions, although the department has completed work on them.

He added that sanctions already in place have borne fruit, and that the United States hope to exploit certain "economic vulnerabilities" in Iran.

"We will need to impose measures simultaneously in many different forms in order to be effective," he said.

At the same hearing, Deputy Secretary of State James Steinberg said efforts to rally other veto-wielding members of the UN Security Council behind fresh sanctions, most notably Russia and China, were making progress.

"The Russians seem to be more open to additional sanctions," Steinberg said pointing to recent comments made by President Dmitry Medvedev.

"You're seeing a coming together of countries around the world to recognize that this is Iran's last opportunity and if they fail to take it there is a greater openness to this.

"I myself was in Beijing last week to discuss this with very senior Chinese leadership to make clear that we view this as critical and a core interest of ours that's important to our relationship with China.

"So I think that there is a — a strong sense that these efforts will pay off."

He described the administration's approach as a "dual track strategy that presents a clear choice to Iran's leaders," address the concerns of the international community or face increasing international isolation.

Meanwhile, the banking panel's powerful chairman, Democratic Senator Christopher Dodd, said he was strongly in favor of ratcheting up the pressure on Tehran, and said 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, which will combine proposals from various lawmakers, 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 export of sensitive technology.

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.

Iran held nuclear talks last week with world powers, and a second round of talks has been set for October 19.

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