Senator Richard Lugar, the leading Republican foreign-policy expert in Congress, said President Barack Obama is following the right policy in Iran and warned of the dangers of war.

“The idea of moving with our allies, as many as we can find, on effective sanctions on the country has been the right move” on Iran, Lugar said in an interview with Bloomberg Television’s “Political Capital with Al Hunt” airing this weekend.

Israeli Prime Minister Benjamin Netanyahu and the Obama administration have disagreed over how to handle Iran’s production of enriched uranium.

“I understand even some wanting to go to war immediately to stop it where it is and so forth. But even within Israel, the reports are that the debate with Netanyahu is very intense,” said Lugar, an Indiana Republican. “We’re really going to have hell to pay. They will come back on us, and the implications for the Israeli people here are very severe.”

Netanyahu has insisted the best way to stop Iran’s nuclear program is to set explicit “red lines” limiting its enrichment of uranium that would justify military action if crossed. The U.S. and Europe have rejected that approach, preferring a combination of economic sanctions directed against Iran and diplomatic engagement with Tehran.

Lugar, whose 36-year Senate career is coming to an end after he lost re-nomination in a primary in May, rejected Republican presidential nominee Mitt Romney’s stance that Obama hasn’t been tough enough on Iran and that he hasn’t offered enough support to Israel. Romney has sought to use signs of differences between Obama and Netanyahu over Iran to raise doubts with U.S. Jewish voters about the president’s commitment to Israel and his ability to manage turmoil in the Middle East and North Africa.

Lugar widened his distance from Romney’s foreign-policy platform, calling the nominee’s plan to call China a currency manipulator a “campaign mode.”

The U.S. had a $295 billion trade deficit with China last year, an 8.2 percent increase over 2010. A report last month by the Economic Policy Institute in Washington said the imbalance has cost 2.7 million U.S. jobs in the past decade.

“It’s not a new argument, but it’s one that has some fervor with people who believe this gives a competitive disadvantage to us,” Lugar said in the interview. “And it does, in some industries, without any doubt. All I’m saying is that, whatever the disadvantage is, it’s being narrowed bit by bit.”