U.S. Senate panel approves Iran fuel sanctions bill

By Susan Cornwell

WASHINGTON (Reuters) - A bill to impose sanctions on companies providing Iran with gasoline and limit other business dealings with the country cleared a U.S. Senate panel on Thursday, as lawmakers stepped up pressure on Tehran to stop its nuclear work.

Like a bill that advanced on Wednesday in the House, the Senate legislation seeks to cut Iran's gasoline supplies if negotiations fail to resolve the standoff over Tehran's nuclear program, which Washington fears is aimed at making a bomb.

"We must send a very clear signal to Iran's leaders that if they continue to defy the will of the international community, our nation is prepared to confront them," Senator Chris Dodd, chairman of the Banking Committee, said before the panel approved the bill unanimously.

The goal is to put pressure Iran by raising gasoline pump prices and possibly crippling its economy. Critics say such a step could backfire by trampling on international diplomatic efforts and angering U.S. trading partners and allies.

It was unclear how soon the bill would be brought before the full Senate. Even if such a measure does pass both chambers, it is not clear it would be enforced.

The Obama administration says it is committed to working with global partners to put pressure on Iran, so it could be reluctant to take unilateral steps.

One senator, Republican Bob Corker, warned the measure was a "tacit vote of no-confidence" in President Obama's ability to handle negotiations with Tehran.

"The State Department did not want to see this happening," Corker said. Corker voted for the bill in committee but said he favored amending it later to give the president more leeway in working with other countries in imposing any sanctions.