Action of tetracycline on 30s ribosomal subunits
The crystal structure of tetracycline bound to the 30S ribosomal subunit of Thermus thermophilus has been determined by Pioletti et al. and the major binding site (Tet-1) interferes with the location where the A-site tRNA binds as shown in the stereo pair, below:



They write:


  “Thus tetracycline can physically prevent the binding of the tRNA to the A-site. This mode of interaction is consistent with the classical model of tetracycline as an inhibitor of A-site occupation, and hence offers a clear explanation of the bacteriostatic effects of tetracycline.”


So the proximal effect would appear to be the first alternative in the question, although the second may be an indirect consequence.