The move could for the first time hurt Tehran's oil exports, and the European Union is due to consider similar steps soon. As tensions have risen, Iran threatened last week to close the Strait of Hormuz, a narrow Gulf shipping lane through which 40 percent of world oil flows, if sanctions hit its oil exports.
At the same time, it signalled on Saturday that it was ready to resume stalled international talks on its nuclear programme. It says the programme is completely peaceful and, in what Iranian media described as an engineering breakthrough, state television said Iran had successfully produced and tested its own uranium fuel rods for use in its nuclear power plants.
The rods were made in Iran and inserted into the core of Tehran's nuclear research reactor, the television reported. Iran is trying to develop its own nuclear fuel cycle to power reactors without international help. Western countries are sceptical of some of Tehran's engineering claims but say they fear Iran's enrichment of uranium to make fuel could eventually lead to it producing a weapon. In what has become part of a pattern of sabre-rattling in recent weeks, Iran is finishing a 10-day Gulf naval exercise.
Deputy Navy Commander Mahmoud Mousavi told IRNA state news agency it had successfully test fired a medium-range surface-to-air missile equipped with "the latest sophisticated anti-radar technologies". Iran has apparently delayed pre-announced plans to test its long-range missiles during the drill, saying the weapons would be launched in the next few days. Its long-range missiles could hit Israel or US bases in the Middle East.
The United States and Israel say they have not ruled out military action against Iran if diplomacy fails to resolve the dispute over its nuclear programme.
Western analysts say Iran sometimes exaggerates its nuclear advances to try to gain leverage in its stand-off with the West.
The UN Security Council has already imposed four rounds of global sanctions on Iran, but Russia and China have refused to back sanctions that would seriously affect Iran's oil industry, so the EU and United States have taken measures on their own. Just how far the latest US measures will go could depend on how Obama decides to implement them.
The US defence funding bill, approved by Congress last week, aims to reduce the oil revenues that make up the bulk of Iran's export earnings. Obama signed it in Hawaii on Saturday, where he was spending the Christmas holiday.
If enforced strictly, the sanctions could make it nearly impossible for most refiners to buy crude from Iran, the world's fourth biggest producer. However, Obama asked for scope to apply the measures flexibly, and will have discretion to waive penalties. Senior US officials said Washington was consulting foreign partners to ensure the new measures did not harm global energy markets.