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Crackdown on Iran working, U.S. officials say

/ Source: The Associated Press

Bush administration officials urged patience with U.S. efforts to crack down on Iran as Democrats leveled fresh criticism of the government's approach.

Officials from the departments of State, Treasury and Commerce told the Senate Banking Committee on Wednesday that the administration's multi-pronged plan — relying on diplomacy and financial sanctions to force Tehran to abandon its nuclear ambitions and to stop bankrolling terrorism — is working.

"Iran is a country very much on the defensive right now," said R. Nicholas Burns, undersecretary for political affairs at the State Department.

The U.S. is leading efforts to slap harsher U.N. sanctions on Tehran for refusing to freeze uranium enrichment. Administration officials said they believed these additional sanctions would soon be adopted, an encouraging sign of international support. They also viewed favorably Russia's decision to put off delivery of enriched uranium fuel it had promised to provide Iran by this month.

Burns said that's akin to Russia, which has long-standing trade ties to Iran, saying: "This won't be business as usual."

"The weight of international opinion is now shifting against the Iranians," Burns said.

Dodd sees 'catch-up mode'
Senate Banking Committee Chairman Chris Dodd, D-Conn., complained that the administration "is in catch-up mode in the diplomacy department with respect to Iran." However, he went on to say that the recent administration efforts at the U.N. "seem to be bearing some fruit in a second and tougher U.N. sanctions resolution."

Said Burns: "The United States is committed to pursuing a diplomatic solution to the challenges posed by Iran. This will require patience and persistence."

Dodd and other Democratic lawmakers wondered why the United States wasn't acting more aggressively to curb foreign investment in Iran's energy sector or to clamp down on more Iranian banks.

Sen. Robert Menendez, D-N.J., complained that the United States wants to be tough with Iran but instead sometimes acts "like a pussycat."

Stuart Levey, undersecretary for terrorism and financial intelligence at the Treasury Department, said the U.S. government wants to put as much pressure as it can on Iran. However, it must also be mindful that administering financial sanctions against companies in Europe or other countries that are allies with the United States could prompt a "backlash" that could harm the international coalition that has formed against Iran.

Targeted measures used
In addition to economic sanctions that ban most trade with Iran, Levey said the U.S. government is "relying more and more on targeted measures directed at specific individuals, key members of the government, front companies and financial institutions." Some measures require U.S. banks to freeze funds. Other measures includes bans on travel or arms transfers, he said.

The U.S., meanwhile, has been working hard to persuade foreign companies not to do business with Iran, including making investments in the energy industry, Levey said. "We do try to persuade ... with some success," he said.

Levey said Iran operates as the "central banker of terror," and estimated that it routes $200 million a year to Hezbollah.

Dodd, speaking to reporters after the hearing, said new tools may be needed to put pressure on Iran. Dodd said he hasn't ruled out legislation that could tighten up existing provisions or possibly impose additional restrictions. He didn't offer details.