Speaking on Fox News Sunday, Rice also reiterated Iran had just "weeks" to respond to a western ultimatum that it halt potential bomb-making nuclear work and return to negotiations or face UN action.

The chief US diplomat played down a threat Sunday by Iran's supreme leader, Ayatollah Ali Khamenei, that any move against the major oil producer would put world energy supplies at "serious risk."

"I think we shouldn't place too much emphasis on a threat of this kind," Rice said.

"I think something like 80 percent of Iran's budget comes from oil revenue, and so obviously it would be a very serious problem for Iran if oil were disrupted on the market."

Rice spoke three days after the United States, its European allies, Russia and China announced agreement on a new carrot-and-stick approach to Iran to persuade the Islamic republic to halt sensitive uranium research.

While details of the package have not been made public, Rice said it included a stern reaction if Iran refused to cooperate -- despite initial reluctance by Moscow and Beijing to sign on to punitive measures.

"We are absolutely satisfied with the commitments of our allies to a robust path in the Security Council should this not work," she said.

Rice was undeterred by the Iranian authorities' continued refusal to halt uranium enrichment, saying they needed time to digest the latest Western offer. She declined to set a deadline for a response but said it must come soon.

"We will not allow Iran to drag this out," she said. "I think it's fair to say that we really do have to have this settled over a matter of weeks, not months."

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