A US-drafted proposal to the council would slap a visa ban and an assets freeze on Saleh and two of his allies, Shiite Huthi rebel leaders Abdulmalik al-Huthi and Abdullah Yahya al-Hakim.
Saleh served as Yemen's first president after unification in 1990 before being forced to step down in February 2012 under a regional peace plan.
But the strongman is seen as prime backer of the rebel Huthi movement that seized the capital Sanaa in September and has since spread its control into central and west Yemen, in defiance of a UN peace plan.
The fighting has raised fears that Yemen -- which neighbors oil kingpin Saudi Arabia and lies on the key shipping route from the Suez Canal to the Gulf -- may collapse into a failed state.
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A Security Council committee met Tuesday to discuss the proposed sanctions and the talks were "constructive," a diplomat said.
The 15 members of the council now have until Friday evening to raise objections before the proposal returns to the sanctions committee for action.
The top UN body in August called on the Huthi rebels to end their armed uprising against President Abdrabuh Mansur Hadi and warned of sanctions against those who threaten the stability of Yemen.
Yemen, an important US ally in the fight against Al-Qaeda, has been under pressure on several fronts in recent years, including from militant attacks and demands in the south for independence.
Overnight drone strikes killed at least 20 suspected Al-Qaeda militants near the central town of Rada, tribal sources and witnesses said on Tuesday.