Attorney General Eric Holder said Tuesday that the federal government may challenge Arizona's new law on immigration.

The attorney general told reporters that he fears Arizona's new law is subject to potential abuse.

The Arizona law requires state law enforcement officials to ask people for documentation if they are suspected to be in the country illegally, and makes it a state crime if they are.

The Justice Department and the Homeland Security Department are conducting a review of the state law.

A number of options are under consideration including "the possibility of a court challenge," Holder said in response to questions on the Arizona law posed during a news conference on another topic.

Separately, Homeland Security Secretary Janet Napolitano said Arizona's new immigration law could siphon federal money and staff needed to go after dangerous immigrants.

Testifying before the Senate Judiciary Committee, Napolitano said the office of Immigration and Customs Enforcement fears it will have to use its stretched resources to deal with those arrested under Arizona's new law.

President Barack Obama has instructed the Justice Department to examine the Arizona law that he said threatens to "undermine basic notions of fairness." He also is pressing anew for national immigration legislation, saying, "If we continue to fail to act at a federal level, we will continue to see misguided efforts opening up around the country."