President Barack Obama is ordering a new wave of sanctions on Iran.

The US president announced the executive order this afternoon instating additional sanctions on Mahmoud Ahmadinejad's government and on Iran's Central Bank, because of the "deceptive practices" of it and other Iranian banks.

The sanctions mean a freeze on all Iranian government assets that come under the control of the US.

Announcing the decision in a letter to congress, he said Iran posed a "continuing and unacceptable risk" to the international financial system.

"I have determined that additional sanctions are warranted, particularly in light of [Iranian banks' efforts] to conceal transactions of sanctioned parties, the deficiencies in Iran's anti-money laundering regime and the weaknesses in its implementation," he added.

Speaking on the weekend, President Obama expressed confidence that the US and Israel would find a diplomatic solution to ameliorate the Iranian nuclear threat.

"We are going to make sure we work in lock step and work to resolve this, hopefully diplomatically," he said.