According to the Haaretz daily, at a meeting in Jerusalem with the speaker of the U.S. House of Representatives, Nancy Pelosi, Ehud Olmert said, "The present economic sanctions [against Iran] have run out of steam," and proposed "a naval blockade of Iran," using the U.S. navy to limit movement in and out of the Islamic Republic by Iranian merchant ships.
As an alternative, he proposed placing restrictions on Iranian aircraft, businessmen and senior Iranian officials at airports throughout the world.
"Iranian businesspeople, unable to land anywhere in the world, would pressure the regime," Haaretz quoted Olmert as saying.
Iran has defied three rounds of relatively mild United Nations Security Council sanctions over its refusal to halt uranium enrichment, which many Western countries say is being used by Tehran as a cover for nuclear weapons development. Iran says the program is of an entirely peaceful nature and is necessary for energy production.
Russia and China, which have strong trade links with Iran, have so far prevented stronger sanctions against the Islamic Republic, using their vetoes on the Security Council.
Olmert reiterated that drastic measures to stop Iran's efforts to obtain nuclear weapons did not necessarily mean violence.
The newspaper did not provide a U.S. response to the Israeli proposals for a naval blockade. However, the White House yesterday categorically denied a report in the Jerusalem Post that U.S. President George W. Bush intended to attack Iran before the end of his final term of office in January 2009.
White House spokeswoman Dana Perino said the article was "not worth the paper it's written on."
The country's nuclear program has contributed to tensions between Washington, with Bush refusing late last year to rule out military action against Teheran despite a report by the country's intelligence community which suggested that the Islamic Republic had halted attempts to create a nuclear bomb in 2003.
Olmert is planning to visit Washington in June to discuss the Iranian nuclear program and prospects of U.S.-brokered peace negotiations between Israel and the Palestinians.