A group of leading senators from both parties is close to agreeing the text of a new round of sanctions, which could be announced early this week if they overcome the final sticking points, according to Senate aides.
However, Democratic leaders in Congress are under intense pressure from the White House to block any new sanctions, as it fears these could undermine the interim agreement reached with Iran two weeks ago.
Western officials involved in the Iran negotiations believe that the most significant result of pressure from the Congress could be to impose a strict timeframe on the next round of talks. Although the Geneva agreement gives the parties up to a year to reach a final agreement, sceptical members of Congress are trying to enforce a six-month deadline for a deal with Iran.
Speaking at a US-Israel conference on Saturday, President Barack Obama said that the administration would seek to impose new sanctions if Iran does not negotiate a final agreement on its nuclear programme.
However, the White House has consistently argued that to pass a new sanctions law while the negotiations are continuing would be a provocative step that might backfire.
"If we pass sanctions now, even with a deferred trigger which has been discussed, the Iranians, and likely our international partners, will see us as having negotiated in bad faith,” White House spokesman Jay Carney said last week.
The proposed legislation is being negotiated by Senators Robert Menendez and Charles Schumer on the Democratic side and Mark Kirk and Lindsey Graham on the Republican side.
Under the bill being discussed, the administration would need to provide Congress with updates every month to show that Iran was abiding by the terms of the interim agreement. The text also calls for new sanctions to be imposed if a final deal is not reached.
The unresolved question among the senators is over what to do if a deal has not been reached within six months but the administration says that an agreement is close, with the Democrats pushing for language that gives the administration a little more flexibility.
Given that the House of Representatives will be in session for just one more week, congressional aides say that the most likely way new sanctions can pass this year would be to attach an amendment to the annual Pentagon funding bill which is currently under review. That means the central figure in the discussion will be Harry Reid, the majority leader in the Senate who has a lot of authority over which amendments are accepted to the Pentagon bill.
Aides involved in the talks said that a compromise between Democratic and Republican leaders in the Senate would need to be reached by Tuesday for the sanctions legislation to move this year. John Kerry, secretary of state, is due to appear before a congressional hearing on Tuesday to talk about the Iran negotiations.
One of the main concerns for many members of Congress – as well as the Israeli government – is that the Iran talks will drag on well beyond the initial six months, which will lead to a gradual fraying in the sanctions regime.
Supporters of new sanctions say the proposed bill does not violate the interim agreement. "All we are doing is locking in the president’s own statements about sanctions if the talks fail,” said one Senate aide. "The objective is to make sure the interim deal does not become the new status quo.”
The Geneva agreement says that the US, "consistent with the respective roles of the President and the Congress”, will not pass new nuclear-related sanctions.
In his comments on Saturday, Mr Obama refuted the idea that more sanctions could force Iran to accept much tougher restrictions on its nuclear programme.
"The idea that Iran, given everything we know about their history, would just continue to get more and more nervous about more sanctions and military threats, and ultimately just say, OK, we give in – I think does not reflect an honest understanding of the Iranian people or the Iranian regime,” he said.