Obama used his last major international address to the world before the November 6 presidential elections to press Iran on its nuclear programme, saying the country has time and again failed to take the opportunity to demonstrate that its nuclear programme is peaceful.
"America wants to resolve this issue through diplomacy, and we believe that there is still time and space to do so.
But that time is not unlimited," Obama said in his address to the 67th session of the General Assembly.
In a reference to Iran's support for President Bashar Al Assad, Obama said just as Tehran restricts the rights of its own people, the Iranian government "props up a dictator in Damascus and supports terrorist groups abroad.
While Iran says its nuclear programme is for peaceful purposes, western nations claim Tehran wants to build a nuclear weapon.
Obama said, "Make no mistake: a nuclear-armed Iran is not a challenge that can be contained. It would threaten the elimination of Israel, the security of Gulf nations, and the stability of the global economy.
"It risks triggering a nuclear-arms race in the region, and the unraveling of the non-proliferation treaty. That is why a coalition of countries is holding the Iranian government accountable. And that is why the United States will do what we must to prevent Iran from obtaining a nuclear weapon," he said.
Obama said America respects the right of nations to access peaceful nuclear power, but one of the purposes of the United Nations is to see that power is harnessed only for peaceful purposes.