The US House of Representatives pushed forward with a bill to impose sanctions on foreign firms doing business in Iran on Wednesday despite White House concerns it would hinder efforts to rein in Iran's nuclear ambitions.

John Bolton, United States Ambassador to the United Nations, left, and Andrey Denisov, Russian Ambassador to the United Nations, leave a meeting with the 5 permanent members of the UN Security Council, held at the offices of the British Mission to the U.N., Tuesday, March 14, 2006, in New York. Russia and China have rejected proposals from the United States and other veto-wielding members of the U.N. Security Council for a statement demanding that Iran clear up suspicions about its nuclear program, diplomats said Monday. [AP]

Backers of the bill said they went a long way to meet the Bush administration's demands for more flexibility to enforce the sanctions, which would be aimed at foreign entities that invest in Iran's energy sector.

The bill, which has overwhelming support in the full House, cleared the International Relations Committee by 37-3. Committee aides said it could reach the House floor in April, but legislation in the Senate appeared on a slower track.

Committee Chairman Henry Hyde, who had been sceptical of the bill, gave it qualified support.

"As modified, and perhaps with future modifications as the legislative process continues," the Illinois Republican said the bill could "become a powerful tool to prevent Iran's development of weapons of mass destruction."

The State Department had said on Monday the mandatory sanctions would "create tensions with countries whose help we need in dealing with Iran, and shift the focus away from Iran's actions and spotlight differences between us and our allies."

The United States continued to discuss with other UN Security Council members a text aimed at limiting Iran's nuclear program. Washington says Iran is trying to make nuclear weapons but Tehran says it is just developing nuclear energy.

The sanctions legislation lets the White House use six-month waivers that could be repeated for individual cases, and eases the standard for implementing waivers from an earlier draft. But it requires the administration to conclude investigations of violations within 180 days, as lawmakers said previous administrations avoided imposing sanctions by never concluding the probes.

MENU OF SANCTIONS

The bill targets foreign entities that invest $40 million or more in Iran's energy sector in a 12-month period. It would require use of two sanctions from a menu including a ban on US Export-Import Bank assistance, export licensing restrictions, and a ban on the U.S. government buying or contracting for goods or services from the sanctioned entity.

France, Japan, Indonesia and Pakistan would be among potentially affected countries, committee aides said.

If a company invests $20 million in a year, the administration would withhold US foreign aid to its home country.

The bill also requires public and private pension plan and mutual fund managers to notify investors if funds are invested in entities subject to sanctions, and urges US government pension funds and similar funds to shun such investments.

"We ask our allies to do what the United States did over a decade ago -- divest from Iran's energy sector, the cash-cow of the ayatollahs' nuclear aspirations," said Rep. Tom Lantos of California, the committee's top Democrat.

Lantos said he would be "delighted if our legislation does nothing more than reinforce sanctions" passed by the UN Security Council. "But we cannot count on that," he said.

Florida Republican Rep. Ileana Ros-Lehtinen, who co-sponsored the bill with Lantos, said she hoped it would "serve as leverage for cooperation from those allies who claim to be concerned about the growing Iranian threat but who continue to invest billions in Iran's energy sector and continue to assist Iran's nuclear and missile programs."

The legislation is built on the Iran-Libya sanctions act that expires in July, dropping references to Libya in the wake of reforms there.