The U.S. is proposing sanctions aimed at shutting down what the Bush administration call Iran's support for terrorism in the Middle East.
The measures announced by Secretary of State Condoleezza Rice target three Iranian financial institutions and Iran's Revolutionary Guard. Rice says the sanctions are a response to Iran's nuclear program.
The sanctions are the latest effort by the Bush administration to ratchet up the pressure on the Iranian government. Earlier this year, the White House instituted sanctions on another Iranian bank.
However, the hawkish elements of the Bush administration want the president to go further and carry out some sort of military action against Iran.
The latest sanctions prohibit Americans and U.S. companies from doing business with the Iranian banks and Revolutionary Guard. But the key to the sanctions will be if it affects foreign companies and countries from dealing with the Iranian institutions.
Two countries expected to oppose the sanctions are China and Russia, which do a significant amount of business with Iran.