Obama says U.S., allies discussing Iran sanctions

Obama's warning came after Iran rejected a compromise proposal to ship its low-enriched uranium abroad so that it could not be further enriched to make weapons. Talk of fresh sanctions also showed that Obama is preparing for the next phase should Iran fail to meet his year-end deadline for progress in negotiations.

"They have been unable to get to 'yes', and so as a consequence, we have begun discussions with our international partners about the importance of having consequences," Obama said at a news conference with South Korean President Lee Myung-bak.

"Our expectation is, is that over the next several weeks we will be developing a package of potential steps that we could take that will indicate our seriousness to Iran."

The U.S. is meeting in Brussels on Friday with five other nations — Britain, China, France, Russia and Germany — to discuss what measures could be used against Iran, according to an EU official who spoke on condition of anonymity because she was not authorized to disclose details of the gathering.

The tough talk on Iran came as Obama wrapped up an eight-day, four-nation tour of Asia in which global issues — nuclear disarmament, climate change, economic recovery — dominated and goodwill abounded. There also were few new agreements on pending issues.

South Korea, Obama's final stop, was a case in point.

Obama and Lee showed unity on disarming nuclear-armed North Korea and differences over concluding a free-trade agreement stalled by Congress. Obama announced that Stephen Bosworth, his special envoy to North Korea, would make his first trip to Pyongyang on Dec. 8 to test the waters for resuming nuclear disarmament talks.

Lee said Obama endorsed his "grand bargain" for North Korea — a package of economic assistance and investment in exchange for full nuclear disarmament in a single step rather than the piecemeal approaches that have twice failed over the past two decades. "I think President Lee is exactly right and my administration is taking the same approach," Obama said.

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