WASHINGTON - Dramatically hardening the U.S. reaction to Iran's disputed elections and bloody aftermath, President Obama yesterday condemned the violence against protesters and lent his strongest support yet to their accusations that the hardline victory was a fraud.

Obama, who has been accused by some Republicans of being too timid in his response to events in Iran, declared himself "appalled and outraged" by the deaths and intimidation in Tehran's streets - and scoffed at suggestions that he was toughening his rhetoric in response to the criticism.

He suggested that Iran's leaders will face consequences if they continue "the threats, the beatings and imprisonments" against protesters.

But he repeatedly declined to say what actions the United States might take, retaining the option of pursuing diplomatic engagement with Iran's leaders over its suspected nuclear-weapons program.

"We don't know yet how this thing is going to play out," the president said. "It is not too late for the Iranian government to recognize that there is a peaceful path that will lead to stability and legitimacy and prosperity for the Iranian people. We hope they take it."

Citing the searing video circulated worldwide of the apparent shooting death of a woman identified as Neda Agha Soltan, 26, who bled to death in a Tehran street and now is a symbol for the demonstrators, Obama said flatly that human-rights violations were taking place.

In Iran yesterday, demonstrators - overwhelmed by police and left with limited alternatives - resorted to more subtle ways of challenging the outcome of the presidential election: holding up posters, shouting from rooftops and turning on car headlights.

But the restrained expressions of discontent appeared to be scattered as Iran's ruling clerics dealt the opposition new setbacks, making clear they have no intention of holding a new vote and setting up a special court to deal with hundreds of protesters arrested in more than a week of unrest. Iran also expelled two diplomats from Britain - a nation it bitterly accuses of meddling and spying - and Britain in turn sent two Iranian envoys home. *