Clinton told Thai television that the administration of President Barack Obama was still open to engagement with Iran over its atomic drive but said that if Tehran obtains the bomb, then it would not make it any safer.

"We will still hold the door open. But we also have made it clear that we will take action, as I've said time and time again, crippling action, working to upgrade the defence of our partners in the region," she said.

Her previous references to "crippling action" have referred to sanctions.

"If the US extends a defence umbrella over the region, if we do even more to support the military capacity of those in the Gulf, it is unlikely Iran will be any stronger or safer," Clinton said.

"They won't be able to intimidate and dominate as they apparently believe they can once they have a nuclear weapon."

Clinton made the comments before heading to Asia's largest security forum in the Thai resort island of Phuket, where talks were expected to focus on possible nuclear links between North Korea and Myanmar.

US lawmakers on Monday stepped up pressure on Obama to ready tough new economic sanctions on Iran in the event Tehran fails to freeze its nuclear programme by late 2009.

Major world powers agreed at a recent summit in Italy that they would assess Iran's nuclear cooperation at a G20 meeting, to be held in Pittsburgh, Pennsylvania late September, ahead of the United Nations General Assembly.

Iran, laboring under UN sanctions for refusing to freeze its nuclear work, has rejected the West's charges that it seeks nuclear weapons under cover of a civilian atomic energy program.

Obama has said he wants a diplomatic solution to the standoff but has repeatedly warned that he has not ruled out the use of force.

Last week, in a public speech marking six months on the job, Clinton renewed a limited US offer to talk with Iran despite its post-election violence and she defended the principle of engaging anti-American regimes.

Noting the Iranian leadership's crackdown on those protesting the June 12 presidential election, she conceded that neither she nor Obama held "any illusions" that direct talks with Iran "will guarantee success."

She said the Shiite Muslim fundamentalist leadership must be presented with a choice between further international isolation and the benefits of international integration.

Clinton also rejected critics who suggest that engagement is "a sign of naivete or acquiescence to these countries' repression of their own people."

The Obama administration has taken steps toward engaging not just Iran but other US foes like Syria, Cuba and Venezuela, but its hopes to engage North Korea have stumbled amid a showdown over Pyongyang's missile and nuclear programs.

Discussion over North Korea, particularly its possible military cooperation with military-ruled Myanmar, were set to dominate the talks in Phuket over the next two days.

Both countries are isolated and under international sanctions. Clinton said earlier Wednesday that the United States was worried "about the transfer of nuclear technology" between the two pariah states.

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