At a hearing on Wednesday of the House International Relations' Middle East subcommittee, US State Department officials said they were using diplomatic pressure on European governments and companies to cancel oil and gas contracts with Tehran.

  

A seven-year-old United States law allowing sanctions on companies that do

business with Iran has never been enforced.

  

"We hope we can force the administration to use the tool of sanctions," Representative Ileana Ros-Lehtinen of Florida, the subcommittee chairwoman, said after the hearing.

  

"It has never been effectively tried. But President Bush has the credibility to use the big stick,"  she added.

 

Ros-Lehtinen and other committee members said oil and gas revenue in particular was helping Iran finance its support for armed groups, pursuit of nuclear weapons and efforts to undermine the Middle East peace process.

 

Iran's development

  

Iran's economic rise and its ability to advance its nuclear and chemical weapons programmes are directly tied to the US administration’s lack of enforcement of sanctions, she said.

  

The sanctions bill would allow US officials to freeze accounts of companies that invest in Iran's oil industry.

  

The call by the House of Representatives is the latest attempt by the US to apply  pressure on Iran. Earlier, the Bush administration openly supported sporadic protests within Iran against the Khatami government.

 

The US has also accused Tehran of interfering in Iraq, supporting members of the al-Qaeda network in its country, backing the Hizb Allah in Lebanon against Israel and developing nuclear weapons.

 

Tehran has strongly criticized US interference in its internal affairs and denied all the accusations.