US President Barack Obama has tightened sanctions on Iran, including its central bank, seeking to increase pressure on the country's economy as a nuclear showdown intensifies.

Obama signed an executive order on Sunday that implements parts of a new sanctions regime passed by congress late last year, allowing US institutions to freeze all property and interests of the Iranian government. The order took effect on Monday.

Obama's decision comes amid high tensions with Iran, which has threatened to close the crucial Strait of Hormuz, a crucial oil and natural gas shipping lane from the Gulf. Israel has also suggested it may attack Iran's nuclear sites soon, insisting that the government in Tehran is close to being able to build a nuclear weapon.

The executive order allows US institutions to freeze all property and interests of the Iranian government, the central bank of Iran and all Iranian financial institutions that come within US jurisdiction. Previously, US banks were required to reject and send back, rather than block and freeze, Iranian transactions.

In a letter to Congress, Obama said more sanctions were warranted, "particularly in light of the deceptive practices of the Central Bank of Iran and other Iranian banks.'' He said the problems included the hiding of transactions of sanctioned parties, the deficiencies of Iran's anti-money laundering regime and the unacceptably high risk posed to the entire international financial system by Iran's activities.

The measures, passed with wide majorities in congress last year, also included a requirement for Obama to impose sanctions on foreign financial institutions that do business with the Iranian central bank or other finance firms, but Obama did not implement those sanctions on Monday.