"As President (Barack) Obama says, we are willing to extend a hand if the other side unclenches its fist in order to have some process of engagement but it will only be done in close consultation with our friends," she said at a press conference after an international donor conference on aid to Gaza.

Clinton however, declined to elaborate on remarks by a US official who quoted her as saying that she doubted Iran would respond to overtures by Obama.

"We have made it very clear that we are going to consult constantly with our friends and partners (regarding Iran)," she said.

During a meeting with her UAE counterpart Sheikh Abdullah bin Zayed al-Nahayan in the Egyptian resort of Sharm el-Sheikh, Clinton said she was "doubtful Iran will respond" to any attempt at engagement between the archfoes, a US official said.

"She said her eyes are wide open with regard to Iran. We are under no illusions," the official said.

Obama said on Friday he would pursue "principled and sustained" engagement with all Middle Eastern states including Iran and Syria.

His policy represents a clear shift from previous president George W. Bush, who rejected talks unless Iran halted uranium enrichment, the process which makes fuel for power plants but can also be used to produce the core of an atomic bomb.

The chairman of the US Joint Chiefs of Staff, Admiral Mike Mullen, said on Sunday that he believed Iran had enough fissile material to build a nuclear bomb. "We think they do, quite frankly," he told CNN.

Mullen's comment drew a strong denial from Tehran, which insists that its nuclear programme is aimed solely at producing energy. "All this talk is baseless," foreign ministry spokesman Hassan Ghashghavi said.

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