There was an international consensus to avoid putting "more hardship than is absolutely necessary" on the Iranian people, US defence secretary Robert Gates said.
The United States called on world powers to work together to put more pressure on the Iranian government to curb its nuclear programme.
US defence secretary Robert Gates, during a visit to Rome, said sanctions targeting the Iranian government would be most effective. There was an international consensus to avoid putting "more hardship than is absolutely necessary" on the Iranian people, he said.
Gates, who discussed the Iranian issue with Italian leaders, said Tehran's response to US and Western overtures has been very disappointing.
"If the international community will stand together and bring pressure to bear on the Iranian government, I believe there is still time for sanctions and pressure to work," Gates said at a news conference with Italy's defence minister.
"But we must all work together... I think all of us can do more," Gates said, without mentioning any countries by name.
China has made clear it wants the powers to keep talking rather than impose new sanctions on Tehran.
Iranian president Mahmoud Ahmadinejad on Sunday told the country's Atomic Energy Organisation to start work on producing nuclear fuel for a Tehran research reactor, raising the stakes in the dispute.
Gates stopped short of saying what types of sanctions should be imposed on Iran if it refused to back down.
But he told reporters: "Pressures that are focused on the government of Iran, as opposed to the people of Iran, potentially have greater opportunity to achieve the objective," Gates said.
"We have seen what is going on inside Iran," he added, referring to growing protests by Iranians against the government.
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