Congress sent President Barack Obama legislation on Thursday that bars foreign firms that sell petroleum products to Iran from winning US government deals.

Lawmakers are also studying a number of other measures to punish Iran, which Western powers and Israel claim is seeking to develop an atomic bomb. Tehran has denied the allegations and insists it has only a civilian nuclear energy program for peaceful purposes.

The draft bills aim to provide Obama with the means to sanction Tehran, should his diplomatic outreach fail.

"I think what Congress is doing is all too predictable given the political utility of passing these kinds of measures in this environment. But I don't think it is a particular asset to American diplomacy," Suzanne Maloney, an Iran expert at the Brookings Institution, told AFP.

"We have at this stage at least a reasonable beginning to a diplomatic process with Iran. These measures I think only create the prospect for the administration to be working against itself."

On Wednesday, the House of Representatives passed legislation allowing state and local governments and pension funds to end investments in firms that have 20 million dollars or more invested in Iran's petroleum or natural gas operations.

The divestment measure does not directly impose sanctions on Iran but shields states and local governments from lawsuits if they pull their money out of such businesses.

The increased congressional activity comes in the wake of revelations that Iran had kept secret for years an underground nuclear fuel facility near the holy Shiite city of Qom.

But Maloney said there was "very little prospect" that the legislation pending in Congress, dominated by Obama's Democratic Party, would have the intended impact of changing Iran's nuclear ambitions.

"In general, we have seen that sanctions against Iran have not been effective. What they do is they drive up the cost of Iranians doing business," said Indiana University professor Jamsheed Choksy.

"The current sanctions that have just been passed by Congress and the future ones that they are also contemplating are also likewise not to be effective."

The United States has imposed sanctions on Iran for the past three decades since the two countries severed ties in the wake of the 1979 Islamic Revolution that toppled the US-backed shah.

Maloney pointed instead to multilateral sanctions, noting that only "broad-based and widely enforced" measures are truly effective and cautioning that US congressional action "could only alienate some of the most important allies of Iran."

Key players Russia and China -- both veto-wielding United Nations Security Council members -- have long opposed tougher sanctions on Iran.

Despite being a major oil producer, Iran lacks domestic refining capabilities and relies on imports to meet 40 percent of its gasoline needs.

With US lawmakers eager to force Iran to bow to global demands to freeze its nuclear drive, the House Foreign Affairs Committee said it would take up on October 28 the punishing sanctions bill.

The Iran Refined Petroleum Sanctions Act is directed at firms heavily invested in Iran's energy sector or that provide help to boost the Islamic republic's domestic production.

The measure would also hit companies that provide Iran with gasoline or help its imports, notably by providing ships or shipping services, as well as insuring or financing such activity.

But Georgetown University professor Daniel Brumberg said he was "dubious that even enhanced sanctions, including sanctions on refined petroleum, would compel Iran to bend to Western demands."

Tehran would consider such a measure "as a hostile act designed to undermine the regime and would become even more defiant," he said.

Demonstrating readiness to implement tougher sanctions could prove useful, "but only so long as the administration is ready to accompany that with carrots and incentives," added Brumberg.

earlier related report
World powers, Iran meet in Vienna on uranium deal
The UN nuclear watchdog will host talks between Russia, France, the United States and Iran here Monday that are seen as crucial to resolving the long-running standoff over Tehran's disputed nuclear drive.

Officials from Moscow, Paris, Tehran and Washington will meet at the International Atomic Energy Agency's headquarters in Vienna, to work out the modalities for a deal allowing the Islamic Republic -- which the West accuses of seeking to build an atomic bomb -- to secure nuclear fuel for a research reactor.

The reactor, which makes isotopes for medical uses such as cancer treatment, runs on uranium enriched to 19.75 percent, a level not so far achieved by Iran by itself.

Until now, the fuel has come from a batch of around 116 kilogrammes (2555 pounds) purchased by Iran from Argentina back in 1993, which is now running low.

As part of its controversial atomic drive, which the US in particular charges is a cover to build a bomb, Iran has managed to produce by itself uranium enriched to levels of no more than 5.0 percent.

Iran insists its nuclear activities are entirely peaceful and so-called low-enriched uranium (LEU) is indeed used to produce fuel for civilian nuclear reactors. But when enriched further -- to 90 percent and more -- uranium can also be used to make the fissile core of an atomic bomb.

The West is concerned that if Iran enriches still further the stockpile of around 1,500 kilogrammes of LEU that it has so far amassed at its plant in Natanz, it will bring it closer to levels needed to make weapons-grade material.

According to Western diplomats, Iran contacted the IAEA in June to tell it that the current batch of fuel for the reactor would run out by the end of 2010, and asked the watchdog if it could find a country that would sell it some more.

The IAEA responded in September with a plan whereby Iran would hand over its stockpile of LEU to Russia to enrich it to the level required to run the research reactor.

Another country, France, would then take the enriched fuel and fashion it so that it could be used in the reactor, said a European expert with knowledge of the dossier.

"It's a win-win situation," one Western diplomat said.

The Iranians would get the fuel they needed, while at the same time, Western fears would be alleviated that the material could be used to make a bomb.

At rare high-level talks with six world powers in Geneva in October, Iran agreed to buy the higher grade uranium required from overseas suppliers.

"This meeting in Vienna is now an opportunity to show that they're serious, that they're willing to follow through on that," another diplomat said.

"The Iranians made this proposition, now it remains to be seen whether they say 'yes'," said yet another diplomat.

It is not yet clear exactly who will be attending the meeting, what will be concretely discussed and what outcome can be expected.

All the IAEA has said is that the talks will begin at 3:00 pm (1300 GMT) on Monday and "may extend through Tuesday and Wednesday."

Diplomats said that, contrary to expectations, Iran will not be sending its atomic chief Ali Akbar Salehi.

If he does not attend, that could be seen by the West as a sign that Iran is not really serious, a diplomat said.

Iran for its part has warned that it would go ahead and enrich uranium on its own if the deal failed.

Last week, the Iranian news agency ISNA quoted the spokesman of the Iran Atomic Energy Organisation, Ali Shirzadian, as saying: "We will write a letter and announce (to the IAEA) that Iran will act directly to supply the fuel for the Tehran reactor."

Shirzadian said the reactor needed around 200 kilogrammes of medium-enriched uranium to operate, but did not say how long that would last.

And the fact that Iran "fully owns the enrichment technology" will give it "leverage ... at the negotiating table," he said.

Nevertheless, Iran would prefer to "buy the fuel for the Tehran reactor in bulk as it is more economical," Shirzadian added.

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