Facing growing pressure in a US election year, Biden said he held Iran responsible for supplying the weapons to the people who carried out the deadly attack on a military base.
The White House warned that "multiple actions" were likely in retaliation for the first fatal attack on US forces in the region since the Israel-Hamas war broke out in October.
A leading pro-Iranian group in Iraq said Tuesday that it would halt attacks on US forces as military action loomed, but there was no sign it would be enough to stop Washington retaliating.
"Yes," Biden told reporters as he headed for campaign fundraisers in Florida when asked if he had decided on his response, but he did not give details.
"I don't think we need a wider war in the Middle East. That's not what I'm looking for," he added.
Tensions have soared in the region since the October 7 attacks by Hamas against Israel, with US forces in Iraq and Syria coming under attack more than 165 times in the intervening months.
The United States and Britain have also launched a campaign of air strikes against Yemen's Iran-backed Huthi militants, who have carried out repeated attacks on shipping in the Red Sea in what they say is solidarity with Gaza.
'Multiple actions'
Republicans have urged the Democrat to punish Iran for Sunday's drone strike on a US military facility near the Jordanian-Syrian border, with some urging direct strikes on Iran itself.
Asked whether Iran was to blame for the attack on Jordan, Biden replied: "I do hold them responsible, in the sense that they're supplying the weapons to the people who did it."
Biden added that "we'll have that discussion" when asked if a direct link to Iran had been established.
But Biden's administration believes hitting Iranian territory could cause the region to erupt, with strikes on allied militias and possibly on Iranian Revolutionary Guard personnel in other countries more likely, US media reported.
"It's very possible that what you'll see is a tiered approach here, not just a single action but potentially multiple actions," National Security Council spokesman John Kirby told reporters aboard Air Force One.
The deaths of the service members came as campaigning for the US presidential election in November gets into full swing, adding to the political pressure on Biden.
The president will attend the "dignified transfer" of the bodies of the three slain service members at an airbase in Delaware on Friday, the White House said.
Washington will also be careful not to undermine sensitive talks on a new deal to release hostages held by Hamas in exchange for a pause in Israel's offensive on Gaza.
'Cycle of retaliation'
Tehran has denied any links to the drone strike in Jordan, and said that like Washington it was not seeking an expansion of conflict.
A pro-Iran group in Iraq, Kataeb Hezbollah, said Tuesday it would halt its attacks on US troops as military action loomed.
The militia has not claimed the Jordan attack, but the Pentagon has said it has the group's "footprints."
"We're announcing the suspension of our military and security operations against the occupying forces to avoid any embarrassment for the Iraqi government," Kataeb Hezbollah wrote on its website.
Asked about the group's statement, Pentagon spokesman Major General Pat Ryder said: "Actions speak louder than words."
"We have called on the Iranian proxy groups to stop their attacks. They have not. And so we will respond in a time and manner of our choosing," Ryder said.
The Kremlin, a close ally of Tehran, on Tuesday called for de-escalation in the Middle East.
"In our view, the overall level of tension is very alarming and, on the contrary, now is the time for steps to de-escalate tensions," Kremlin spokesman Dmitry Peskov told reporters in Moscow.
China also warned against a "cycle of retaliation" in the Middle East.
Beijing has close ties with both Russia and Iran, with all three seeking to challenge what they say is Washington's global hegemony.
