US Senator Joe Lieberman told The Jerusalem Post Monday that any engagement with Iran must come with "not just carrots but sticks" and that he is introducing legislation to deliver just that. "The message to Israel and the leaders of the Arab countries in the Middle East, who are very worried about Iran getting a nuclear weapon is that there are a group of senators, a bipartisan group, that accept engagement with Iran, support it, but understand that there have to be not just carrots but sticks, and these sanctions are a big stick," Lieberman said. Earlier Monday, during an appearance before the American Enterprise Institute, he urged the Obama administration to adopt a strict timeline and benchmarks for any diplomatic strategy it pursues with Teheran. The administration needed "a clear plan of action for the months ahead that has goals and schedules and teeth," and among them must be "a clear and credible set of benchmarks, milestones by which we can measure Iranian behavior, and an explicit timeline by which the Iranians understand that we must start seeing results," he said. Lieberman called on the Obama administration to develop such a timeframe with allies so that Iran "does not view engagement as a process without an end." "It's worth this effort of engagement and negotiation both in the hope that it works and also to that we try everything we can short of military power - which remains an option, though not a preferred one," he said. At the same time, pressure on Iran must be increased as part of the engagement effort, he said. To that end, on Tuesday, Lieberman and 20 other senators proposed legislation tightening sanctions on exporting refined petroleum to Iran. Lieberman noted that during the US presidential campaign, Barack Obama pushed to use Iran's dependence on foreign companies for refined petroleum as a place where effective international pressure could be applied, and expressed hope that would translate into White House approval for the bill. He noted that the list of co-sponsors encompassed leading liberal and conservative members, including Russ Feingold (D-Wisconsin) and John Thune (R-South Dakota), arguing that a broad coalition existed for quick passage of the measure. Lieberman also warned those who think that deterrence can work with Iran as it did with the Soviet Union, noting that the Nuclear Non-Proliferation Treaty didn't exist during America's arm race with Moscow. He also pointed out that a major risk of Iran acquiring nuclear weapons is that it would increase the chance of them reaching the hands of terrorists, which would hurt the effectiveness of deterrence because it would be harder to threaten retaliation against a stateless and elusive enemy. The Senate bill is expected to pass because it has broad support from both Republicans and Democrats and is not opposed by the White House. A similar bill is expected to be introduced in the House. In the House, the Financial Services Committee on Tuesday approved an unrelated bill that enables state and local government to divest their public pension funds from companies investing more than $20 million in Iran's energy sector and to take other actions to protest the Iranian government. Under the Senate proposal, the foreign companies could be barred from doing business in the United States unless Iran complies with international demands to halt its suspect nuclear program. The bill would also allow the administration to freeze the assets of those companies under US jurisdiction. The measure could apply to several major firms and their subsidiaries - among them oil giants Shell, BP, Reliance and Vitol. The bill would also target shipping firms that deliver refined fuel to Iran and even insurers for the ships. "We need to give them a choice: you can do business with Iran's $250 billion economy or our $13 trillion economy, but not both," said Sen. Jon Kyl who is a lead sponsor of the bill along with Sens. Evan Bayh and Lieberman. The State Department would not discuss the specifics of the bill but said it was generally supportive of any move that would help press Iran to address concerns it is trying to develop nuclear weapons. "We want to do whatever we can to put additional pressure on the (Iranian) government," said State Department spokesman Robert Wood. Bayh and other proponents of the legislation said the expanded sanctions authority would fit in well with Obama's plan to engage Iran by providing him an additional "stick" in the existing "carrot-and-stick" approach on the Iranian nuclear program. "The purpose of this legislation is to give President Obama a new tool in his diplomatic arsenal to stop Iran from getting nuclear weapons," said Bayh. Bayh and others said their bill would provide the "best opportunity" to stop Iran from getting the bomb "without a resort to military force."