HONOLULU: President Barack Obama has signed a $633 billion defence bill for the next year that tightens penalties on Iran and bolsters security at diplomatic missions worldwide after the deadly attack in Benghazi, Libya.    

Obama had threatened to veto the measure because of a number of concerns, including limits on his authority to transfer terrorist suspects from the US military prison at Guantanamo Bay, Cuba, for one year.

But Obama said that although he continued to oppose certain sections of the bill, ''the need to renew critical defence authorities and funding was too great to ignore''.

The bill includes cuts in defence spending that the president and congressional Republicans agreed to in August 2011, along with the end of the war in Iraq and the drawdown of American forces in Afghanistan.