Bush said that if Iran continues with its programme, which the United States and Israel believe is aimed at developing an atomic bomb despite Iran's denials, "there has to be a consequence for their intransigence."

"If they continue to move forward with the program, there has to be a consequence," he said, speaking to reporters following an hour-long talk with Olmert at the White House.

"And a good place to start is working together to isolate the country," he said, branding a nuclear-armed Iran as an "incredibly destabilizing, and obviously very threatening to our strong ally," Israel.

Olmert said that he had a "deep conversation" with Bush and that the two leaders had "complete understanding over their objectives" regarding Iran.

Backed by the United States, Israel has said sanctions are necessary following Tehran's failure to suspend uranium enrichment.

The president, who used the meeting with Olmert to divert attention from the situation in Iraq and his Republican Party's humiliating defeat in last week's midterm elections, also rejected direct talks with Tehran unless it freezes its nuclear plans.

"If the Iranians want to have a dialogue with us, we have shown them the way forward, that is, for them to verifiably suspend their enrichment activities," Bush told reporters at the White House.

Speaking in Hebrew after the meeting, Olmert said that "our position is that we must do everything in our power to make sure the Iranians do not cross a technological threshold that would allow them to develop nuclear weapons."

Israel -- widely considered the Middle East's sole, if undeclared, nuclear weapons power -- considers Iran its chief threat, pointing to calls from President Mahmoud Ahmadinejad for the Jewish state to be wiped off the map.

After the meeting Olmert also said that Israeli and US officials discussed ways to kick start the stalled Middle East peace process.

"The Americans and us have been exchanging ideas that could allow positive developments regarding future negotiations between us and the Palestinians," Olmert told reporters.

That "intensive dialogue ... includes exchanging ideas and thoughts on ways to promote conditions that would allow negotiations with the Palestinians," he said.

Olmert said he remained attached to the internationaly-backed "roadmap to peace" based on Bush's vision of a Palestinian state living side-by-side with Israel.

Earlier on US television, Olmert said he hoped diplomacy would dissuade Tehran from pursuing its nuclear program.

"We will not tolerate the possession of nuclear weapons by Iran," he told NBC television.

Asked whether his country was considering a preemptive strike on Tehran's nuclear facilities, Olmert answered: "I hope we don't have to reach that stage."

But the Israel leader said his first choice is a negotiated resolution.

"Every compromise that will stop Iran from acquiring nuclear capabilities, which will be acceptable to President Bush, would be acceptable to me."

Asked what he believed to be the timeline for Iran developing possible nuclear weapons, Olmert responded, "it's a matter of, unfortunately, shorter time than most people think."

"I don't want to measure it in days or weeks, but it's quite close," he said.

Olmert added that he was not seeking Washington's protection from Tehran.

"I am not coming to the United States to ask America to save Israel," he said, saying his country had drawn the lessons of the Holocaust and World War II.

The Israeli leader added: "I am not looking for wars or confrontations. I am looking for the outcome."

He added that, in his view, the only result that matters is "whether it will succeed to stop Iran from possessing nuclear weapons."

On Sunday, Olmert reiterated Israel's position that Iran should be intimidated into halting its nuclear programme.

"Iran will not agree to make compromises if it is not afraid of the options it would face in the absence of a compromise," Olmert told reporters.

He hinted that "Israel has options which I am not ready to specify" regarding Iran's nuclear programme.

US State Department spokesman Sean McCormack said Monday that Washington no longer sought direct contacts with Iran to discuss ways to ease unrest in neighboring Iraq, saying that channel of communication "didn't work out."

"We went through a period where there was an offer of that channel of communications," McCormack said.

"It didn't work out for a variety of different reasons," he said.

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