By Patricia Zengerle
WASHINGTON, Jan 7 (Reuters) - Legislation that could undermine the international nuclear deal with Iran cleared a U.S. congressional panel on Thursday, setting up a potential showdown over one of President Barack Obama's signature foreign policy initiatives.
The Republican-led Foreign Affairs Committee of the House of Representatives approved the measure by a voice vote that appeared to be along party lines, setting it up for consideration by the full House.
Opponents say the "Iran Terror Finance Transparency Act," which would increase lawmakers' oversight of the Iran agreement announced in July, is an attempt by Republicans to violate terms of the landmark deal with new legislation because they could not muster enough opposition to scuttle it last year.
Republicans said the measure would hold the Democratic administration to its commitment not to ease pressure on Iran's support for terrorism or its ballistic missile program.
Several committee Democrats, including some who opposed the nuclear deal last summer, vehemently objected to the measure.
"I believe it doesn't serve any purpose to have bills like this that are designed to kill the deal," said U.S. Representative Eliot Engel, the top Democrat on the Foreign Affairs Committee.
"I don't want to vote 62 or 63 times on killing the Iran agreement," he said, in a reference to congressional Republicans' dozens of votes seeking to repeal Obama's healthcare reform law.
Engel was one of several Democrats who came out against the agreement with Iran, saying he did not believe the Tehran government would keep its promise to curb its nuclear ambitions in exchange for sanctions relief.
Sources familiar with the situation said last week that the Obama administration was preparing sanctions on Iran over its ballistic missile program, but decided not to go ahead after informing members of Congress.
Congressional aides have said they still expect the administration will eventually impose new sanctions on Iran over the missile program.
(Reporting by Patricia Zengerle; Editing by Tom Brown)