By Patricia Zengerle and Arshad Mohammed
WASHINGTON (Reuters) - The Obama administration's appeal to Congress to hold off on imposing more sanctions on Iran won key support on Tuesday when the chairman of the U.S. Senate Banking Committee said he would not back new legislation at this time.
Any such legislation could jeopardize delicate negotiations toward a comprehensive agreement with Tehran to curb its nuclear program after world powers clinched an interim deal with Iran last month, President Barack Obama's administration has argued.
"The president and Secretary (of State John) Kerry have made a strong case for a pause in Congressional action on new Iran sanctions, so I am inclined to support their request and hold off on committee action for now," Democratic Senator Tim Johnson said in a statement.
The Banking Committee oversees sanctions legislation in the Senate, and has been debating for months whether to go ahead with new restrictions to push Tehran to roll back its nuclear program.
On Monday, Iranian Foreign Minister Javad Zarif was quoted as saying any new U.S. sanctions - which the United States promised not to impose in the November 24 Geneva agreement - would kill the deal.
The administration has been engaged in an all-out bid to make its case for a delay.
Kerry testified at a public hearing of the House of Representatives Foreign Affairs Committee on the issue on Tuesday. He and Treasury Secretary Jack Lew scheduled a classified briefing for the entire 100-member Senate on Wednesday.
The lead U.S. negotiator in Geneva, State Department's Wendy Sherman, and David Cohen, the Treasury's sanctions chief, were to testify before the Senate Banking Committee on Thursday.
'NOT SAYING NEVER'
At Tuesday's hearing, Republicans and Democrats raised questions about the interim deal between Iran and six major powers under which Tehran would restrict its nuclear program in exchange for limited relief from U.S. economic sanctions.
The Obama administration hopes that the agreement, slated to last six months but renewable for a further six months by mutual consent, will provide time to negotiate a final deal with the Iranians within a year.
"We are asking you to give our negotiators and our experts the time and the space to do their jobs and that includes asking you while we negotiate that you hold off imposing new sanctions," Kerry said.
"I am not saying never ... If this doesn't work, we are coming back and asking you for more. I am just saying not right now," he added. "This is a very delicate diplomatic moment."
Obama has said he can envision a final agreement that would ensure Iran does not have the capacity to build a nuclear bomb. Tehran says its nuclear program is entirely peaceful.
The Republican-led House passed a new package of sanctions by a vote of 400-20 in July. That bill seeks to cut Iran's oil exports to near zero over the course of a year to try to reduce the flow of funds to the nuclear program.
However, the Democratic-led U.S. Senate has moved much more slowly, in part at the administration's request, and it remains unclear whether Congress may be willing to put the November 24 deal at risk by passing additional sanctions.
In a sign of bipartisan skepticism over the interim agreement, Eliot Engel, the top Democrat on the House panel, told Kerry he thought the administration would have more leverage with more sanctions.
"I think it could potentially strengthen your hand with a good cop, bad cop scenario," Engel said.
Democrats and Republicans in the Senate also say they are close to introducing a new standalone bill - outside the banking committee - that would seek to impose new sanctions in six months if Iran does not comply with the interim deal.
It was not clear how such a bill would fare without banking committee support, given that the Senate's Democratic leaders are among Obama's strongest allies in Washington.
Kerry suggested any new sanctions would be seen as an act of bad faith because Washington agreed under the November 24 deal not to impose additional sanctions. He also said they could undermine the unity of the six major powers who negotiated that deal: Britain, China, France, Germany, Russia and the United States.
"We are at a crossroads, we are at one of those hinge-points in history - one path could lead to an enduring resolution in the international community's concerns about Iran's nuclear program, the other path could lead to continued hostility and potentially conflict," Kerry said.
(Additional reporting by Timothy Gardner and Lesley Wroughton; Editing by Mohammad Zargham)