By Doug Palmer and Matt Spetalnick
WASHINGTON (Reuters) - The United States imposed new financial sanctions on Syria Wednesday and edged closer to issuing an explicit call for Syrian President Bashar al-Assad to step down.
With international pressure intensifying on Assad over his brutal crackdown on protests, one U.S. official said the Obama administration is expected to lay out a tougher line this week. But a source familiar with the situation said while a decision was expected soon, the timing had not yet been finalized.
The Treasury Department expanded sanctions against Assad's government and inner circle, adding Syria's largest commercial bank and mobile phone operator to a blacklist of companies slapped with asset freezes and barred from doing business in the United States.
The White House reasserted President Barack Obama's view that Assad has "lost legitimacy" and Syria "will be a better place" without him, but again stopped short of specifically calling on him to leave power.
But in response to months of criticism of Obama's failure to demand Assad's departure, his administration was preparing to speak out more forcefully.
The White House has been cautious because of its limited influence with Damascus and questions about its ability to force Assad to heed any U.S. call to leave power, which could further undercut U.S. credibility in the region.
But growing condemnation of Assad's crackdown from Saudi Arabia and other Arab states is seen by Washington as having left him more vulnerable. This has given fresh impetus to voices in the U.S. administration seeking a tougher stance.
"Through his own actions, President Assad is ensuring that he and his regime will be left in the past," White House spokesman Jay Carney told reporters.
But when asked whether Obama this week would directly urge Assad to leave power, Carney said: "Any future announcements or things that the president might say I'll leave to that time."
WASHINGTON'S QUANDARY
While Obama has explicitly called for Libyan leader Muammar Gaddafi's ouster, even a U.S.-supported NATO air war backing Libyan rebels has so far failed to dislodge him.
Washington, already stretched militarily by wars in Afghanistan and Iraq, has effectively ruled out military action in Syria.
Assad is a close ally of U.S. foe Iran, and further isolation could push Damascus deeper into Tehran's orbit. Syria is also seen having the ability to stir up trouble on Israel's borders.
But increased bloodshed in Syria has led to greater pressure on Washington from human rights groups, which say it has not done enough to curb Assad's efforts to crush an unprecedented uprising against his 11-year rule.
Human rights activists estimate Assad's crackdown on pro-democracy demonstrations over the past five months has left more than 1,600 people dead.
The most significant concrete response so far has been U.S. and European Union sanctions against Assad and his aides.
There are questions, however, whether such measures have any dramatic impact, and Western countries have yet to target Syria's vital oil industry.
In new sanctions, Treasury added the Commercial Bank of Syria, a Syrian state-owned institution, and its Lebanon-based subsidiary, Syrian Lebanese Commercial Bank, to a list that targets proliferators of weapons of mass destruction and their supporters.
Treasury also designated Syriatel, the country's largest mobile phone operator, under a separate presidential order that targets Syrian officials and others responsible for human rights abuses in Syria.
The Treasury said the Commercial Bank of Syria was targeted for providing financial services to Syria's Scientific and Studies and Research Centre and North Korea's Tanchon Commercial Bank, which was listed in 2005 for the support of weapons of mass destruction proliferation.
Syriatel is owned and run by Rami Makhluf, a powerful Syrian businessman and "regime insider," Treasury said.
(Additional reporting by Alister Bull and Tabassum Zakaria; Editing by Anthony Boadle)
