While not discussing specifics about other options, Panetta said the U.S. government believes U.N-imposed sanctions on Iran still have time to work, the Pentagon said in a release.
"The international community has been strongly unified in imposing some strong sanctions on Iran," Panetta said during a news conference at the North Africa American Cemetery and Memorial in Carthage, Tunisia. "The international community will increase the impact of those sanctions in the next couple of months."
Presumptive Republican presidential nominee Mitt Romney said Sunday the United States must take Iran at its word when it called for the extermination of Israel and must prevent the Islamic republic from becoming nuclear weapons-capable.
"The regime in Iran is five years closer to developing nuclear weapons capability," Romney said. "Preventing that outcome must be our highest national security priority."
In Washington, White House spokesman Josh Earnest said the administration believes a window -- "a shrinking window, but still a window nonetheless" -- for a diplomatic solution to be achieved to resolve concerns about the Iranians' failure to live up to their international obligations.
"So we're going to continue to work in coordinated fashion with the international community, including with the Israelis," Earnest said during the daily briefing. "We ... have marched in lockstep with them, we've been side by side with them as they've confronted this threat, and will continue to be."
"All options do remain on the table," he said. "But right now, what we're focused on is taking advantage of this diplomatic window that remains open to pursue a solution that satisfies the world community and results in the international -- in the Iranian regime living up to their international obligations."
Panetta said Monday sanctions are impacting Iran's economy, even if results may not be obvious at the moment.
"What we all need to do is continue the pressure on Iran economically and diplomatically," Panetta said.
The international community must convince Iran's leaders to negotiate, stop developing nuclear weapons and rejoin the global community, he said.
"We believe the best course of action is to continue that pressure and to continue that unity to convince them to do what's right," the defense chief said.
In Washington, State Department spokeswoman Victoria Nuland also said all options would be considered regarding Iran's nuclear program.
"We always talk about how we're doing on our strategy of combining pressure with diplomacy," Nuland said during her daily media briefing. "You know where we are on these issues. We don't take anything off the table, but we are focused now on trying to get the pressure and the diplomacy to work in tandem."