"I think a diplomatic solution is in our grasp if we have unity of message and unity of purpose," Rice told a news conference after meeting with her NATO counterparts.

Her remarks followed a day of confusion over Washington's policy on Iran, after the top US diplomat gave an interview with Fox News television in which she apparently scolded the Europeans for their handling of negotiations.

The talks, being led by Britain, France and Germany, have been a key issue during Rice's week-long tour of Europe and the Middle East, her first foreign trip in her new job.

"The Iranians need to hear that if they are unwilling to take the deal, really, that the Europeans are giving ... then the Security Council referral looms," she said in the Fox News interview.

"I don't know that anyone has said that as clearly as they should to the Iranians," she added.

But at EU headquarters she appeared to back off somewhat and would not be drawn on an ultimatum, although she reiterated that Washington was monitoring the proceedings closely.

Evoking US concerns about plans to lift an EU arms embargo on China, she said the two sides' strategic goals on both China and Iran were the same.

"We have unity of purpose, we have unity of message, and we are working to find the right method to deal with both of those quite fundamental issues," she said after meeting European Commission chief Jose Manuel Barroso.

"We've set no deadline, no timeline," she said earlier at NATO, when asked how long the US administration would let talks continue before pushing for other action. "The Iranians know what they need to do."

In Japan however, visiting Iranian Foreign Minister Kamal Kharazi insisted that Tehran had no secrets to hide from the International Atomic Energy Agency (IAEA), the UN nuclear watchdog.

"I assure Mr Minister that all our activities are peaceful," Kharazi told a news conference after talks with his Japanese counterpart Nobutaka Machimura.

"We are ready to cooperate with the IAEA as before, and also to continue talks and negotiations with the three European countries," he added.

Japanese Prime Minister Junichiro Koizumi, who also met Kharazi, urged Iran to meet the EU demands.

The talks are aimed at persuading Iran to call a permanent end to uranium enrichment, a process that can make fuel for nuclear reactors but can also be the explosive core of atomic bombs.

The United States accuses Iran of trying to obtain nuclear weapons under cover of developing a civilian atomic energy programme and has not excluded a military option against Tehran.

But while Washington wants to take the case to the UN Security Council, the Europeans favour seeking to resolve the row through dialogue by offering Iran trade privileges with the 25-nation bloc in exchange for compliance.

"The international community has got to be certain to speak with one very tough voice to the Iranians that it is not going to be acceptable for Iran to build a nuclear weapon under cover of civilian nuclear power," Rice told Fox.

She said the United States had believed all along the Iranians should be referred to the UN Security Council for alleged violations of international non-proliferation norms.

In her later remarks at NATO, Rice urged the Iranians to "take the opportunity that the Europeans are giving them to live up to their obligations."

"The Iranians need to get that message," she said. "We can certainly always remind them that there are other steps that the international community has at its disposal should they not be prepared to live up to those obligations."

At their latest round of talks in Geneva, according to diplomats, Britain, France and Germany warned Iran about activities that verge on breaches of its deal to freeze uranium enrichment.

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