Jerusalem (CNN) -- The United States won't let Iran obtain a nuclear weapon, "period," but sanctions remain the best tool to keep Tehran off the nuclear path, Defense Secretary Leon Panetta said Wednesday in Israel.
Panetta called united, international pressure "the most effective way to stop Iran from obtaining a nuclear weapon."
"We have been steadily applying more and more pressure against Tehran, focusing on diplomatic and economic sanctions, and I believe these steps are having an effect," Panetta said after reviewing an Israeli missile-defense battery with Defense Minister Ehud Barak. But international leaders must keep "maximum pressure" on Iran, he added.
Panetta's comments came on the same day that the Senate and the House passed a measure tightening sanctions on Iran.
"This legislation expands our existing sanctions on Iran's energy sector, and imposes new sanctions targeting shipping and insurance," said Senate Majority Leader Harry Reid, D-Nevada, in a statement. The legislation "closes loopholes and stops the use of front companies or financial institutions to get around international sanctions."
Iran's oil exports have been cut in half, and its currency has lost nearly 40% of its value, he said.
In an interview with CNN's Barbara Starr, Panetta said Israel had not decided whether to attack Iran, which he said would be about a year away from being able to produce a nuclear weapon if it were to decide to do so.
"My message has been that we have a clear goal here, which is to ensure that Iran never gets a nuclear weapon," he said. "If, for some reason, that doesn't work, we're fully prepared militarily with options to enforce that."
Panetta told Israeli leaders that Washington, its leading ally, "stands firmly with Israel" and has a "rock-solid" commitment to its security. After talks with Prime Minister Benjamin Netanyahu, the Pentagon chief said the United States "will not allow Iran to develop a nuclear weapon, period."
But Netanyahu expressed skepticism, saying, "Time to resolve this issue peacefully is running out."
"However forceful our statements, they have not convinced Iran that we are serious about stopping them," Netanyahu said. "Right now, the Iranian regime believes that the international community does not have the will to stop its nuclear program."
Iran has refused international demands that it stop producing enriched uranium, saying that its work is aimed at fueling civilian nuclear reactors. But some Western countries, particularly Israel, say they fear the program is a cover for Iran to develop atomic weapons, and the International Atomic Energy Agency has said it can no longer verify that the Iranian program is strictly peaceful.
U.S. spy agencies believe that Iran has not decided to pursue nuclear weapons but that it is building the "scientific, technical and industrial capacity" that would allow it to do so, James Clapper, the national intelligence chief, told a Senate committee in February.
Concerns have been raised that the window for a diplomatic solution to the matter may be closing, and a military strike by Israel -- the leading U.S. ally in the region -- against Iran's nuclear program may be on the horizon.
Israeli President Shimon Peres said last week that Iran was in an "open war" with Israel after he pointed the finger at Iran and Hezbollah for a bus bombing in Bulgaria last month that killed six people, five of them Israelis.
Iran, which condemned the attack, rejected Israel's claims.
The Obama administration on Tuesday announced new sanctions targeting Iran's petrochemical industries as well as banks in China and Iraq that U.S. officials say helped Iranian authorities evade existing sanctions. Iranian oil exports have been cut by 40%, the International Atomic Energy Agency reports. The rial, Iran's currency, has dropped by nearly the same amount, fueling rampant inflation that has affected ordinary Iranians.
Panetta is on a weeklong trip to the Middle East and North Africa. His stop in Israel came three days after presumptive Republican presidential nominee Mitt Romney visited Jerusalem and pledged to support any measures to keep Iran from developing a nuclear bomb.
At the outset of his trip, Panetta said the issue "hasn't been easy." But, he added, "I think the fact is that when the United States, Israel and the international community remain unified in our position against Iran, that that's the best way to convince Iran to pull back from what they are doing and to abide by international rules and regulations."
Strong support for Israel is a core element of U.S. policy in the Middle East, and the two countries collaborate on military planning and research. One example of that was the "Iron Dome" anti-missile system he saw in Ashkelon, a project that received funding from the U.S. government.
CNN's Jethro Mullen and Paul Colsey contributed to this report.