Rice sought to tighten the screws on Tehran after taking the unprecedented step of sending a top aide to meet Iran's chief negotiator Saeed Jalili at international talks in Geneva on Saturday.

Rice, in Abu Dhabi at the start of an Asian tour, was due to be briefed on the talks by Undersecretary of State William Burns.

Washington had hitherto refused to sit with Tehran on nuclear talks until Iran stopped enriching uranium.

The meeting sent a "very strong message to the Iranians that they can't go and stall... and that they have to make a decision," Rice told reporters en route to Abu Dhabi.

"It clarifies Iran's choices and we will see what Iran does in two weeks. But I think the diplomatic process now has a kind of new energy in it."

The White House later said it expected Iran to reject the incentives package.

"It is the position of the P5-plus-one that Iran should suspend its uranium enrichment, that we provided a very generous incentives package that they apparently are going to miss an opportunity to accept," said spokeswoman Dana Perino of the five permanent UN Security Council members and Germany.

Rice "agreed with the other members to allow Iran to have two more weeks but after that I think that Iran could be looking at, is possibly looking at, additional sanctions," she said.

The six world powers have offered to start pre-negotiations during which Tehran would add no more uranium-enriching centrifuges and in return face no further sanctions -- the so-called "freeze-for-freeze" approach.

"We expected to hear an answer from the Iranians, but as has been the case so many times with the Iranians what came through was not serious," Rice said, accusing Tehran of "small talk" and "meandering."

British Prime Minister Gordon Brown echoed Rice's warning in an address to the Israeli parliament.

Jalili insisted on Monday that the issue of halting enrichment had not even been raised.

But Iranian Deputy Foreign Minister Ali Reza Sheikh Attar said that Tehran "will respond to every positive step of Washington with a similar response."

Rice said diplomacy offered the possibility of both negotiations and the "possibility of punitive measures."

"And we are in the strongest possible position to demonstrate that if Iran doesn't act, then it's time to go back to that track."

She was referring to the Security Council, which has so far imposed three sets of sanctions on Iran.

Rice said she did not expect any "imminent action" as August is a slow month at the council, but expected work to begin soon afterwards on drafting another round of "punitive measures."

The showdown has stirred fears of Israeli or even US military strikes against Iran, as US President George W. Bush has insisted Washington would keep all options on the table. It has also sent oil prices spiralling upward.

Rice said Burns's presence in Geneva helped strengthen diplomacy involving the five permanent Security Council members -- the United States, Russia, China, France and Britain -- and Germany.

The United States has in the past met resistance for tougher sanctions from Russia and China, which have strong economic ties with Iran.

Rice briefed Abu Dhabi Crown Prince Sheikh Mohammad bin Zayed al-Nahayan on the Geneva talks and discussions on the Iranian nuclear file, the UAE's offical WAM news agency reported.

She also met foreign ministers and senior officials from other Arab allies.

Iraqi Foreign Minister Hoshyar Zebari was on hand for the meeting of the "GCC+3" bringing together the six members of the Gulf Cooperation Council, Egypt, Jordan and Iraq.

Rice said the discussions would cover the Middle East peace process, Lebanon, Syria, Iran, Iraq and Afghanistan.

WAM said Abu Dhabi's crown prince, whose country has strong economic links with Iran despite a territorial row, called for "diplomatic solutions" to the region's problems -- a position in line with repeated calls by Arab states in the Gulf for a negotiated settlement to the Iranian nuclear crisis.

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