The prime minister's warning was his strongest yet
Israeli Prime Minister Ehud Olmert has said drastic measures are needed to stop Iran obtaining nuclear weapons.
Speaking to the main pro-Israel lobby in the US, he said Iran must be shown there will be devastating consequences if it did develop such weapons.
The US and others have accused Iran of building a nuclear arms capability. Tehran says its programme is peaceful.
Mr Olmert's US visit comes as he faces pressure at home over corruption allegations, which he denies.
Mr Olmert is expected to discuss the Iranian nuclear issue in talks with President George W Bush on Wednesday.
Mr Olmert told members of the American Israel Public Affairs Committee that targeted economic sanctions imposed against Iran were not enough.
"The long-term cost of a nuclear Iran greatly outweighs the short-term benefits of doing business with Iran," he said.
He continued that Iran's flouting of the international measures so far "leave no doubt as to the urgent need for more drastic and robust measures".
"The international community has a duty and responsibility to clarify to Iran, through drastic measures, that the repercussions of their continued pursuit of nuclear weapons will be devastating," he said.
He did not specify what these measures might be.
Ayatollah Ali Khamenei has denied Iran is seeking nuclear weapons
He also said peace with the Palestinians was "attainable", and pledged to pursue a "historic breakthrough" for peace by the end of the year.
Correspondents say it was the Israeli prime minister's strongest warning yet to Iran.
It followed a speech by Iran's supreme leader, Ayatollah Ali Khamenei, in which he insisted his country would not make nuclear weapons but would continue its civilian nuclear programme.
Earlier, the UN's nuclear watchdog said Iran's alleged research into warheads was of "serious concern", urging the country to give "full disclosure" on its atomic work.
At home Mr Olmert has faced calls that he step down over allegations of corruption.
The prime minister has been accused of taking $500,000 (£250,000) in bribes or illegal campaign donations, accusations that he denies.
He has not been charged, but says he would resign if indicted.