(Updates with comment from Pentagon)
JERUSALEM, May 21 (Reuters) - Israeli Prime Minister Ehud Olmert proposed in talks with a U.S. congressional leader that a naval blockade be imposed on Iran to try to curb its nuclear program, an Israeli newspaper reported on Wednesday.
The Haaretz daily quoted Olmert as telling Nancy Pelosi that "the present economic sanctions have exhausted themselves" and the international community needed to take more drastic steps to stop Iran’s efforts to obtain nuclear weapons.
A spokesman for Olmert declined to comment on the Israeli leader’s talks on Monday with Pelosi, the speaker of the U.S. House of Representatives, in Jerusalem.
"It was a confidential discussion," said the spokesman, Mark Regev.
Pelosi’s office had no immediate comment. On her return to Washington, Pelosi said she and the congressional delegation she led to Israel had discussed with its leaders "the threat posed by Iran."
The prime minister’s suggestions, Haaretz said, included a naval blockade of Iran using U.S. warships to limit the movement of Iranian merchant vessels.
Pentagon spokesman Geoff Morrell said he was unaware of any blockade plans but said the United States intended to step up pressure on the Islamic Republic.
"I‘m not going to get into specifics of how we may or may not increase that pressure militarily," Morrell said. "But as we’ve said from the outset of this problem, all military options remain on the table."
Keeping open a military option has long been the stance of the Bush administration on dealing with Iran and its nuclear program -- which Tehran says is for energy purposes, but which the United States and its allies say is aimed at developing a nuclear weapon.
Olmert also said, according to the report, that international restrictions should be placed on Iranian aircraft, business executives and senior officials.
"Iranian business people who would not be able to land anywhere in the world would pressure the regime," Haaretz quoted Olmert as saying.
Three rounds of limited U.N. sanctions have been imposed on Iran over its nuclear program but Iran has said it will not cease uranium enrichment. Israel, widely believed to have atomic weapons, has said the Iranian nuclear program is a risk to its existence.
Olmert plans to visit Washington in two weeks for talks.
Regev said last week after a visit to Israel by U.S. President George W. Bush that the United States and Israel agreed on the need for "tangible action" and "additional steps" to prevent Iran from developing nuclear arms.
Olmert has stopped short of publicly threatening to use force against Iran. (Additional reporting by Brenda Gazzar in Jerusalem and David Morgan in Washington, Writing by Jeffrey Heller)