Bush says diplomacy is 1st choice with Iran

MESEBERG, Germany (AP) — President Bush, in a new warning to Tehran, said Wednesday he favors a peaceful resolution to the standoff over Iran's nuclear program but has not ruled out the possible use of military force.

Bush spoke at a news conference with German Chancellor Angela Merkel, but his words were aimed at Iran. Bush warned Iran against dragging out the dispute to run the clock out on his presidency.

"My first choice is to solve this diplomatically," said Bush, who is rallying European allies to back tougher sanctions against Iran. But he also said: "All options are on the table," a phrase he has repeatedly used in reference to a possible military strike against Iran, even as a last resort.

Iran, which says it is enriching uranium for peaceful purposes, had a message for Bush on Wednesday too.

President Mahmoud Ahmadinejad said that Bush's presidency was over and the president has failed in his goals to attack Iran and stop its nuclear program. Addressing thousands of people in central Iran, Ahmadinejad described Bush as "wicked," and said that Bush was targeting Iran after dispatching the U.S. military into Iraq and Afghanistan.

"I tell him (Bush) ... your era has come to an end," Ahmadinejad said. "With the grace of God, you won't be able to harm even one centimeter of the sacred land of Iran."

Merkel, who appeared with Bush at the German government's main guesthouse called Schloss Meseberg, said if Iran does not agree to suspend its enrichment program, additional sanctions would be needed.

"If Iran does not meet its commitments, then further sanctions will simply have to follow," she said.

The U.S. and its European allies are waiting to decide if stiffer sanctions should be levied against Iran until after the European Union's foreign policy chief, Javier Solana, visits Tehran to present a package of incentives meant to persuade Iran to stop its enrichment program. The offer, an updated version of one that Iran ignored a few years ago, was developed by the United States, along with Germany, Britain, France, Russia and China.

Solana said Wednesday he believed there was still time for a diplomatic solution, adding that he hoped his trip on Saturday would yield a positive result. "We very much hope ... it will not be just one visit," Solana said in Brussels.

Ahmadinejad said pressures and sanctions won't succeed in forcing Iran to halt its uranium enrichment program. "If the enemy thinks they can break the Iranian nation with pressure, they are wrong," he said.

Iran's foreign minister dismissed threats of military strikes. On a visit to Paris Wednesday, Manouchehr Mottaki said a threat made last week by an Israeli Cabinet minister was "not serious," and he said he does not believe the United States has the capacity to carry out a strike on Iran.

The U.N. Security Council has imposed three sets of limited sanctions against Iran for refusing to halt uranium enrichment, a technology that can be used to produce nuclear fuel or materials for bombs. Iran continues to defy them.

Merkel said she favors having sanctions decided through the U.N. Security Council, but that doesn't preclude any discussion within the European Union about whether there are other punitive measures, perhaps in the banking sector.

At Bush's final U.S.-EU summit Tuesday in Kranj, Slovenia, the leaders issued a joint declaration that said the United States and Europe "are ready to supplement those (previous) sanctions with additional measures" if Iran does not halt enrichment. It also said they would "work together ... to take steps to ensure Iranian banks cannot abuse the international banking system to support proliferation and terrorism."

Addressing opponents of taking certain sanctions, Merkel said, "Let us think of the people in Iran. This is what is essential. I think these people deserve a much more — sort of a better outlook ... and we would hope for the leadership in Iran to finally see reason."

But agreeing to stiffer sanctions, such as taking further steps to squeeze Iran's financial and business dealings, could be difficult for Merkel. Under Merkel, Germany has cut back trade with Iran; German exports to Iran shrank to $5 billion in 2007 from $6.8 billion in 2006. Washington wants Germany to do even more, but German businesses don't want to cut financial ties to Iran.

"German business is not happy," said Julianne Smith, director of the Europe program at the Center for Strategic and International Studies in Washington. "This is going to have political ramifications. She's only going to go so far."

On Iraq, Bush predicted that his administration will be able to finish an agreement with Baghdad that would provide for a permanent U.S. military and diplomatic presence in Iraq. The word "permanent" has drawn opposition to the deal, but Bush insisted the U.S. is not seeking permanent bases in Iraq.

On global warming, Merkel said she has not given up hopes of completing global trade negotiations being conducted under the auspices of the World Trade Organization. However, the so-called Doha Round of trade negotiations is at an impasse because of battles between wealthy countries and developing nations over such issues as farm subsidies.