A senior US official urged South Korea to reduce purchases of crude oil from Iran in line with a US-led drive to sanction Tehran for its suspected nuclear weapons programme.
"We are urging all of our partners to help us, to work with us in putting pressure on the government of Iran to get it to negotiate seriously," said Robert Einhorn, State Department special adviser for nonproliferation and arms control, on Tuesday.
"We are urging them to reduce their purchases of crude oil from Iran and to unwind their financial dealings with the central bank of Iran."
Einhorn who arrived Monday for a three-day visit, made his comments when he held talks with Deputy Foreign Minister Kim Jae-Shin.
He pledged to be "very sensitive" to the economic needs of strong US allies but added: "Iran continues to defy the international community.
"Recently it began increasing enrichment at the Qom enrichment facility to close to 20 percent, which brings them closer to the ability to break out and acquire nuclear weapons."
Iran says its uranium enrichment programme is part of a peaceful atomic energy drive.
South Korea is a close ally of the United States and 28,500 US troops are based in the country.
But the highly industrialised nation is also the world's fifth largest oil importer. In the first 11 months of last year it bought 9.6 percent of its total crude needs from Iran.
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As part of a new drive to raise the pressure on Iran, US President Barack Obama last month signed a bill that imposes tough sanctions against financial institutions dealing with Tehran's central bank.
South Korea currently accounts for around 10 percent of Iran's oil exports and deals with the central bank to make payments.
Einhorn said South Korea is a "global player" in efforts to stem the spread of nuclear weapons, and it was aware that "the situation in Iran and North Korea are related. I think progress on one helps achieve progress on another."
Iran and North Korea are widely suspected of collaborating on missile and nuclear activities.
Einhorn is accompanied by Daniel Glaser, the US Treasury's deputy assistant secretary for terrorist financing and financial crimes.
Kim stressed South Korea's support for international efforts to resolve the nuclear issue but also highlighted fears of economic damage.
Many Koreans "are quite worried that further sanctions against Iran at this time may destabilise the international market for crude oil and accordingly bring about some adverse effect on the Korean economy", he told reporters.
"But I do hope we closely cooperate with each other and try to minimise this adverse effect."
South Korea has blacklisted 231 Iranian firms or individuals as part of its own sanctions but has not banned the import of Iranian petrochemicals or crude oil.