"I have said before that we don't take any options off the table, and we're going to continue to ratchet up the pressure and examine how they respond," he said of Iran in the interview with CBS news.
"But we're going to do so with a unified international community -- that puts us in a much stronger position."
Obama warned of "huge destabilizing effects in the region" if Iran acquires the capacity to make nuclear weapons.
"All the evidence indicates that the Iranians are trying to develop the capacity to develop nuclear weapons. They might decide that, once they have that capacity that they'd hold off right at the edge -- in order not to incur -- more sanctions," he said.
"But, if they've got nuclear weapons-building capacity -- and they are flouting international resolutions, that creates huge destabilizing effects in the region and will trigger an arms race in the Middle East that is bad for US national security but is also bad for the entire world."
Obama said he had reached out to Iran after assuming office last year to give it the option of rejoining the international community but it had only isolated itself further.
"The idea here is just to keep on turning up the pressure," he said.
The US president earlier lobbied Hu Jintao for China's cooperation in a rare hour-long telephone conversation late Thursday from Air Force One.
He also welcomed Hu's attendance at an international nuclear security summit in Washington this month as an "important opportunity for them to address their shared interest in stopping nuclear proliferation and protecting against nuclear terrorism."
The contact drew a sharp response from Iran's top nuclear negotiator, Saeed Jalili, who warned the West to stop "threatening" Tehran, and said China agreed with the Islamic republic that sanctions were no longer useful.
Iran insists its nuclear activities are peaceful.
Source: AFP American Edition