Congress signaled its disapproval of Iranian President Mahmoud Ahmadinejad with a vote to tighten sanctions against his government.

The swift rebuke Tuesday was a rare display of bipartisan cooperation in a Congress bitterly divided on the Iraq war. It reflected lawmakers' long-standing nervousness about Tehran's intentions in the region, particularly toward Israel — a sentiment fueled by the pro-Israeli lobby whose influence reaches across party lines in Congress.

"Iran faces a choice between a very big carrot and a very sharp stick," said Rep. Tom Lantos, chairman of the House Foreign Affairs Committee. "It is my hope that they will take the carrot. But today, we are putting the stick in place."

The House passed, by a 397-16 vote, a proposal by Lantos aimed at blocking foreign investment in Iran, in particular its lucrative energy sector. The bill would specifically bar the president from waiving U.S. sanctions.

Current law imposes sanctions against any foreign company that invests $20 million (euro14.18 million) or more in Iran's energy industry, although the U.S. has waived or ignored sanction laws in exchange for European support on nonproliferation issues.

In the Senate, independent Sen. Joseph Lieberman and Republican Jon Kyl proposed a nonbinding resolution urging the State Department to label Iran's Islamic Revolutionary Guard Corps a terrorist organization.

Kyl and Lieberman said the proposal does not authorize military force against Iran, but encourages the U.S. to cut off its financial support.

Democratic Sen. Jim Webb said he feared the measure could be interpreted as authorizing a military strike in Iran, calling it Vice President Dick Cheney's "fondest pipe dream."

"At best, it's a deliberate attempt to divert attention from a failed diplomatic policy," he said. "At worst, it could be read as a backdoor method of gaining congressional validation for action without one hearing or without serious debate."

The Bush administration had already been considering whether to blacklist a unit within the Revolutionary Guard, subjecting part of the vast military operation to financial sanctions.

The legislative push came a day after Ahmadinejad defended Holocaust revisionists, questioned who carried out the Sept. 11, 2001 terror attacks and declared homosexuals did not exist in Iran during a tense question-and-answer session at Columbia University.

The Iranian president also spoke Tuesday at the U.N. General Assembly.

Lantos' bill was expected to draw criticism from U.S. allies in Europe. During a visit to Washington last week, French Foreign Minister Bernard Kouchner told lawmakers that France opposes any U.S. legislation that would target European countries operating in Iran. He argued that such sanctions could undermine cooperation on dealing with Iran.