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Yahoo! My Yahoo! Mail More Yahoo! Services Account Options New User? Sign Up Sign In Help Yahoo! Search web search Home Singapore Asia Pacific World Business Entertainment Sports Technology Africa Europe Latin America Middle East North America Obama says new U.S. sanctions on Iran toughest ever Reuters - Friday, July 2 Send IM Story Print By Ross Colvin WASHINGTON - U.S. President Barack Obama signed into law on Thursday far-reaching new sanctions on Iran that aim to squeeze the Islamic Republic's fuel imports and deepen its international isolation. Obama said the new sanctions were the toughest ever passed by the U.S. Congress and would make it harder for Iran to buy refined petroleum as well as goods and services to modernize its oil and natural gas sector, the mainstay of its economy. While the door to diplomacy remained open, he said, Iran would come under even greater international pressure if it continued to defy international calls to halt its uranium enrichment program. The United States and its European allies suspect Iran is trying to build an atomic bomb, despite Tehran's insistence that its nuclear program is for the peaceful generation of electricity. "There should be no doubt -- the United States and the international community are determined to prevent Iran from acquiring nuclear weapons," Obama said at the signing of the Comprehensive Iran Sanctions, Accountability, and Divestment Act at the White House. European Union leaders agreed last month to tighten U.N. sanctions on Iran with additional measures targeting Iran's financial, banking, insurance, transportation and energy sectors. The new U.S. sanctions go much further than the measures agreed to by the U.N. Security Council in June and are aimed at ratcheting up pressure on Iran to persuade it to return to international talks on its disputed nuclear program. The U.S. sanctions penalize companies supplying Iran with gasoline and international banking institutions involved with Iran's increasingly powerful Islamic Revolutionary Guard Corps or its nuclear program. Foreign banks that do business with key Iranian banks or the Revolutionary Guards will not be allowed access to the U.S. financial system. Global suppliers of gasoline to Iran could also face bans on access to the U.S. banking system, property transactions and foreign exchange in the United States. NO SILVER BULLET "With these sanctions -- along with others -- we are striking at the heart of the Iranian government's ability to fund and develop its nuclear programs," Obama said. "We are showing the Iranian government that its actions have consequences." Democratic congressman Howard Berman, one of the architects of the new U.S. sanctions package, said he hoped it would provide Obama "with the tools he needs to persuade Tehran to permanently abandon its nuclear weapons program." The new sanctions are designed to hurt Iran where it is most vulnerable -- it's energy sector. The world's fifth-largest oil producer lacks sufficient refining capacity and imports up to 40 percent of its gasoline needs. Recognizing its vulnerability, Iran has drawn up plans to become self-sufficient in gasoline output within two years while reducing domestic demand, partly through phasing out government subsidies. President Mahmoud Ahmadinejad has dismissed the threat of sanctions, saying Iran could be self-sufficient in gasoline "within one week" if necessary. Obama came into office in January 2009 promising a new beginning of diplomatic engagement with Iran if it "unclenched its fist." But after Iran's leaders rebuffed the offer and continued enriching uranium he mobilized international support for a fourth round of U.N sanctions. White House spokesman Robert Gibbs acknowledged on Thursday that the new measures offered no "silver bullet", echoing earlier comments by Central Intelligence Agency director Leon Panetta, who said targeted economic sanctions would probably not deter Iran from seeking a nuclear capability. The sanctions have already started to bite. France's Total this week joined an expanding list of companies that have stopped gasoline sales to Iran, and Spain's Repsol said it had pulled out of a contract to develop part of the country's huge South Pars gas field in the Gulf. 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