By Jamie Crawford
A sharp drop on Monday in the value of Iran's currency shows that international financial pressure over Iran's disputed nuclear program is having an impact, the State Department said.
"The currency is plummeting and firms all over the world are refusing to do business with Iranian companies," agency spokeswoman Victoria Nuland told reporters.
"So this speaks to the fact that we have said these are the most punishing sanctions we have ever been able to amass as an international community, and they are very important for trying to get Iran's attention on the important denuclearization work."
Iran's currency, the rial, plummeted to historic lows against the value of the dollar in open-market trading on Monday.
It has been in a distressed state since U.S. and European sanctions began to take hold earlier this year.
This comes amid a larger debate playing out in the United States and globally about whether the sanctions that target Iran's petroleum sector and its economy, will effectively change the calculus of the Iranian government and open the door to full-scale negotiations over its nuclear program, or whether a military strike against Iran's nuclear complex is the more suitable course.
"The sanctions are intended to maximize the pressure on the regime so that it will understand that the international community is not going to tolerate Iran with a nuclear weapon," Nuland said. "They have to make a choice."
Iran has said its nuclear intentions are peaceful.
Speaking before the United Nations General Assembly last week, Israeli Prime Minister Benjamin Netanyahu said time was quickly running out to find a diplomatic solution to the impasse.
Netanyahu has said sanctions were not having a forceful enough impact on Iran's behavior and has stepped up pressure on the United States to draw a "red line" that Iran cannot cross if it wants to avoid war. The Obama administration has resisted Netanyahu's appeal.
Some analysts who follow the Iranian sanctions say the timetable for achieving their desired result may not add up.
"What's clear is that Iran's nuclear red line will occur long before Iran's economic cripple date – when the regime faces imminent economic collapse as a result of sanctions," Mark Dubowitz, who is with the Foundation for Defense of Democracies, told CNN.
"That is the uncomfortable conclusion that the Obama administration must face: Iranian nuclear physics is beating western economic pressure," he said.
While the sanctions are designed to cripple the Iranian regime financially, the United States says the Iranian people must understand the sanctions are not designed to punish them.
"We want the Iranian people as well to understand that this is a direct response to the choices that their government has made in the context of the international community offering them a diplomatic way out," Nuland said, "which they should take."
The five members of the United Nations Security Council and Germany, the so-called P5+1 group that has been negotiating with Iran over its nuclear program, met last week on the sidelines of the General Assembly. The talks have been stalled for months.
EU Foreign Policy Chief Catherine Ashton will follow up by meeting with Saeed Jalili, Iran's senior nuclear negotiator, in the coming days, Nuland said, to decide whether another round of talks would be constructive.