"Iran is a troublemaker in the international system, a central banker of terrorism. Security assurances are not on the table," she told "Fox News Sunday."

The top US diplomat spoke as Iran said Sunday it would not suspend uranium enrichment despite European Union plans to offer incentives to the Islamic republic if it halts the sensitive nuclear work.

Meanwhile, Israeli Prime Minister Ehud Olmert claimed Iran could obtain a nuclear bomb in "months" and vowed that Israel would take the "necessary measures" to stop this from occurring.

Ahead of new international talks on Iran this week, Rice told Fox, "It's obvious that in addition to the nuclear issue, we have other issues with Iran. We have a state in Iran that is devoted to the destruction of Israel. We have a state in Iran that meddles in the peace process" in the Middle East.

Britain, France and Germany have drawn up a package aiming to persuade Iran to end its uranium enrichment, which Washington and its allies say hides an effort to build a nuclear bomb.

The European proposals are to be discussed at a meeting in London on Wednesday of Britain, China, France, Russia and the United States, the permanent members of the UN Security Council, along with Germany.

Iran said its nuclear program remains on track despite the international pressure.

"We cannot retreat. The (European) proposal should provide ways to secure our rights," foreign ministry spokesman Hamid Reza Asefi told reporters in Tehran. "We will not stop enrichment.

"The basis of our work is that the Islamic Republic of Iran's rights must be recognized in any plan," Asefi said.

The European package could include trade, technology and security benefits if Tehran stops enriching uranium.

Iran says it only wants to make reactor fuel, but the enrichment process can be extended to make weapons.

A draft proposal by the so-called EU-3 says world powers should support Iran building several light-water reactors and should set up a nuclear fuel bank that would guarantee Iran access to reactor fuel but not sensitive fuel cycle technology.

It would also have the United States drop restrictions on Iran buying US commercial airplanes or parts.

But if Tehran does not accept the deal, sanctions should follow.

These punitive measures could include an arms embargo, political and economic measures, a visa and travel ban on selected high-ranking officials and a freeze of assets of individuals and organizations connected to the government.

Asefi repeated Iran's view that any economic sanctions would leave its foreign trading partners worse off.

But Israel warned Sunday that Tehran was inching closer to developing a nuclear bomb.

"The issue of Iran is a very serious one," Olmert told CNN, saying Iran's alleged bid to develop a nuclear bomb "can be measured by months rather than years".

"The technological threshold is very close. The question is, when will they cross the technological line that will allow them at any given time, within six or eight months, to have a nuclear bomb?"

Asked if he expected US and European diplomacy would stop Iran's uranium enrichment program, Olmert replied: "I prefer to take the necessary measures to stop it, rather than find out later that my indifference was so dangerous."

The Iranian program is likely to be discussed by Olmert and President George W. Bush when the Israeli leader visits Washington this week.

The UN Security Council asked Iran on March 29 to heed International Atomic Energy Agency calls to suspend its enrichment work and to cooperate with an investigation, which has so far been unable to determine whether Iran's nuclear program is peaceful or weapons-related.

"I have to admit that after two and a half years of negotiations, we are not as far along as we would like to be," German Foreign Minister Frank-Walter Steinmeier said Sunday during a visit to Kuwait.

China, which opposes sanctions against Iran to resolve the dispute, called on the international community Sunday to show restraint over Tehran's nuclear program.

"We ask everyone to observe all the necessary restraint, and we consider the diplomatic solution is still possible and efforts in this direction must continue," Chinese Foreign Minister Li Zhaoxing told a news conference in the Mauritanian capital Nouakchott.

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