Pressure continued to mount Tuesday against Arizona’s tough new immigration law, with the Obama administration considering a legal challenge and political leaders calling for economic boycotts.

Department of Homeland Security Secretary Janet Napolitano testified before the Senate Judiciary Committee on Tuesday that she had “deep concerns” with the law and said it could siphon resources needed to target criminals. U.S. Atty. Gen. Eric Holder said he was considering “the possibility of a court challenge.”

“I think that that law is an unfortunate one,” Holder said. “It is, I fear, subject to potential abuse. And I’m very concerned about the wedge that it could draw between communities that law enforcement is supposed to serve and those of us in law enforcement.”

The law makes it a state crime to be in Arizona illegally and requires police to check suspects for immigration paperwork. The legislation also bars people from soliciting work or hiring day laborers off the street.

Gov. Jan Brewer cast the law in terms of public safety, saying, “We cannot sacrifice our safety to the murderous greed of drug cartels.” Brewer said she would order the state police training agency to formulate guidelines for law enforcement officers.

But critics said the law will result in racial profiling and discrimination.

Calls for boycotts spread throughout California this week after the bill was signed by Brewer on Friday. The law is scheduled to take effect 90 days after the legislative session ends this week.

On Tuesday, seven members of the Los Angeles City Council signed a proposal for a boycott, calling for the city to “refrain from conducting business” or participating in conventions in Arizona. Councilman Ed Reyes, who coauthored the proposal with Councilwoman Janice Hahn, said he wants city officials to spend the next 90 days assessing the financial relationships that exist between various city departments and businesses based in Arizona.

“If Arizona companies are taking our money, I want to sever that,” he said.

Hahn acknowledged that a boycott would be logistically complicated but said the city should not remain silent. “When people are asked to show their papers, it brings back memories of Nazi Germany,” she said.

A spokesman for City Controller Wendy Greuel identified at least 12 city contracts with Arizona companies that are worth an estimated $7.2 million.

San Francisco supervisors introduced a similar resolution Tuesday, and Mayor Gavin Newsom imposed an immediate moratorium on city-related travel to Arizona, with limited exceptions. Newsom also announced the convening of a group to analyze how a boycott would affect city contracts and purchasing.

City Atty. Dennis Herrera said he hoped the city’s resolution would “be an impetus to others taking an aggressive stand in terms of scrutinizing the services they have with Arizona companies.”

The leader of the California Senate, Darrell Steinberg (D-Sacramento), called the law a “disgrace” and said the state also should consider a boycott. He sent a letter to Gov. Arnold Schwarzenegger asking for an inventory of Arizona businesses and government agencies with which California does business.

“The Arizona law is as unconscionable as it is unconstitutional, and the state of California should not be using taxpayer dollars to support such a policy,” Steinberg wrote.

Already, several organizations have canceled planned conventions in Arizona. The American Immigration Lawyers Assn. announced that it is moving its fall convention, originally scheduled for Scottsdale in September.

“We just felt that given this new law signed by the governor that it would not be right for our association to meet and convene there and take on the issues of immigration in a state that passed such a misguided bill,” said George Tzamaras, spokesman for the group.

Arizona was already reeling from a decline in tourism because of the recession, and the fallout from the law has taken hotel owners by surprise, said Debbie Johnson, president of the Arizona Hotel and Lodging Assn.

“Obviously our members are concerned,” Johnson said. “I thought there would be political issues. It has become so tourism-focused and that, to me, is the unfortunate side.”

Johnson said 200,000 people, many of them Latinos and legal immigrants, depend on a paycheck from the tourism industry. “They don’t want to lose their jobs,” she said.

Barry Broome, president of the Greater Phoenix Economic Development Council, compared the boycott resolutions to the aftermath of Proposition 187, the anti-illegal immigrant measure passed by California voters in 1994.

“You didn’t see people in Arizona trying to leverage political gain from California’s issues,” he said.

Brewer said at a meeting in Tucson on Monday that she wasn’t worried about possible boycotts. “I believe it’s not going to have the kind of economic impact that some people think that it might,” she said.

But Rep. Raul Grijalva (D-Ariz.), who himself called for companies not to plan conventions in the state, said in an interview Tuesday that he expected the state to see declines in business and leisure travel, the trucking industry and retail shoppers from Mexico.

“There are political, legal and economic consequences that are going to hit the state,” said Grijalva, who has received death threats since speaking out against the law. “The disgust goes across state lines.”

The concern about the law crossed international borders, with a travel warning posted by the Mexican government Tuesday. The post, on the Mexican Foreign Relations Ministry website, urged Mexican citizens to be careful in Arizona and to expect harassment and questioning.

anna.gorman@latimes.com

nicholas.riccardi@latimes.com

Times staff writers David Zahniser, Ken Dilanian, Patrick McGreevy and Tracy Wilkinson contributed to this story.