"This important piece of legislation...would impose new sanctions on Iran's refined petroleum sector and tighten existing U.S. sanctions in an effort to create new pressure on the Iranian regime and help stop Iran from acquiring a nuclear weapon," Reid said in a colloquy with Sens. Chris Dodd (D-Conn.) and John Kerry (D-Mass.).

The House passed a sanctions measure 412-12 last week that would enable Obama to bar foreign companies that supply Iran with refined petroleum from doing business in the U.S.

"We must use all the tools at our disposal, from diplomacy to sanctions, to stop Iran's march toward nuclear capability," House Speaker Nancy Pelosi (D-Calif.) said after the bill was approved.

The renewed sense of urgency comes as the year ends with Iran snubbing the latest demands from Washington.

Iranian President Mahmoud Ahmadinejad stressed this week that the Islamic Republic does not recognize, and has no intention to meet, the year-end deadline to accept a P5+1 (the five permanent members of the United Nations Security Council plus Germany) deal to ship enriched uranium out of the country to be returned as nuclear fuel rods. This would not only allow for supervision of the nuclear program, but alleviate fears that Iran was producing nuclear warheads.

"Who are they to set us a deadline?" Ahmadinejad said of the U.S. demand in a Tuesday televised speech. "We set them a deadline that if they do not correct their attitude and behavior and literature we will demand from them the Iranian nation's historic rights."

Iranian Foreign Ministry spokesman Ramin Mihman-Parast told the state-run Islamic Republic News Agency on Wednesday that Iran might come forward with a new proposal, but Ahmadinejad made clear that Iran will press its right to develop the nuclear program that he claims is for energy and medical research.

"We told you that we are not afraid of sanctions against us, and we are not intimidated," Ahmadinejad also said, adding that Iran was "10 times stronger" now than a year ago.

"Mr. Ahmadinejad may not recognize, for whatever reason, the deadline that looms, but that is a very real deadline for the international community," White House spokesman Robert Gibbs said Tuesday.

"The offer that was put forward by the P5+1 and by the IAEA that, I think, clarified for the world what Iran's intentions were, now they have to live up to those responsibilities," Gibbs said. "And if they fail to do so, the international community will act accordingly."

Gibbs, without elaborating, said that the White House "began making plans weeks ago" regarding the next course of action should Iran not abide by the deadline.

There has been no indication that the administration would use force against Iran's nuclear facilities as the White House has clearly favored the diplomatic route from Day One. Chairman of the Joint Chiefs of Staff Adm. Mike Mullen reiterated that this week when he said military action would be of limited use in stopping Iran's "determined pursuit of nuclear weapons."

"My belief remains that political means are the best tools to attain regional security and that military force will have limited results," Mullen wrote to staff in an annual risk assessment. "However, should the president call for military options, we must have them ready."

Israel, however, has hinted at preemptive airstrikes on Iranian nuclear facilities as a last resort, and Prime Minister Benjamin Netanyahu has made the Iranian threat a priority in his talks with Washington. Vice President Joe Biden even said in a July interview on ABC's "This Week" that Israel had the right to deal with Iran as it saw fit.

"If the Netanyahu government decides to take a course of action different than the one being pursued now, that is their sovereign right to do that. That is not our choice," Biden said.

War games recently conducted at Tel Aviv University's Institute for National Security Studies, which included the participation of undisclosed Israeli government figures and with the results passed along to Netanyahu, concluded in Iran continuing to enrich uranium as Obama persisted with negotiations to Israel's disappointment.

A Rasmussen Reports survey released Wednesday found 67 percent of respondents saying that the U.N. has not been aggressive enough in response to Iran's nuclear program, with half of all those polled saying the U.S. should help Israel if it decides to attack Iran.

Officials from the P5+1 nations discussed on a conference call this week potential steps that can be taken against Iran after the beginning of the new year.

"The decision for them to live up to their responsibilities is their decision," Gibbs said. "We have offered them a different path. If they decide not to take it, then the American -- our delegation, with the P5+1, will move accordingly."

Meanwhile, the Senate is poised to move on the Comprehensive Iran Sanctions, Accountability, and Divestment Act of 2009 cosponsored by Senate Banking Committee Chairman Dodd and Ranking Member Richard Shelby (R-Ala.).

"It is now clearer than ever that tougher sanctions must be a key element of our comprehensive Iran strategy going forward," Dodd said Thursday. "My primary goal with this bill is to prevent Iran from developing a nuclear weapons capability."

Dodd said he would have liked to move toward conference on the bill before the holidays. "While I would have strongly preferred that, I recognize that given the delays on healthcare reform, we will not now have time to do that," he said.

Foreign Relations Committee Chairman Kerry, who this week floated the idea of visiting Tehran, a move that would be unopposed by the White House, added that senators "share the goal of creating maximum leverage in our efforts to prevent Iran from developing a nuclear weapon."

As in the House, the Senate sanctions are likely to have heavy bipartisan support, even as Republicans have expressed frustration with what they view as too-light pressure by the administration on the Islamic Republic.

"We've wasted a year," Sen. John McCain (R-Ariz.) said Monday on ABC's "Good Morning America." "Sanctions have to be tried before we explore the last option. The worst option is a military action."