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Increasingly frustrated by Iranian defiance over its nuclear program, the Obama administration has been crafting a "menu" of sanctions that could be imposed by the United Nations or in concert by the United States and its European allies.

U.S. officials, congressional aides and Western diplomats said the administration has grown increasingly cool to broad-based sanctions targeting the oil sector with the aim of destabilizing the Iranian economy.

Such measures, while favored by a growing number of U.S. lawmakers, would not only be a hard sell in the U.N. Security Council and Europe, but could have unintended consequences like undercutting Iranian public support for the opposition movement, officials and diplomats said.

"This is not about trying to bring Iran to its economic knees. It is about stopping the nuclear weapons program," said a Western diplomat. Broad-based sanctions aimed at destabilizing the overall economy "would just feed into Iranian paranoia" about the West, according to the diplomat, who spoke on condition of anonymity.

Eight people were killed in anti-government protests on Sunday, and Iran has expanded its crackdown on the groups, arresting at least 20 opposition figures.

U.S. President Barack Obama has condemned what he said was the "iron fist of brutality" used to quell the protests and demanded the immediate release of detainees.

YEAR-END DEADLINE

Iran has rebuffed the West's year-end deadline to accept... >>>