Interviewed on ABC television, Rice was pressed on a Senate resolution passed in September that labeled Iran's Revolutionary Guards a terrorist operation -- a step that critics said had brought war nearer.

She said that President George W. Bush was clear "that he's on a diplomatic path where Iran comes into focus."

"Obviously, it can be the case that he will never take his options off the table, but this particular resolution has nothing to do with that from our point of view," Rice said referring to the prospect of military force on Iran.

"This resolution is saying that there need to be strong measures taken against Iran, which we have definitely done," she said after the Bush administration announced new sanctions on Iranian groups, including the Guards.

Rice spoke a day after US President George W. Bush and German Chancellor Angela Merkel discussed diplomatic strategy towards Iran.

The two leaders appear to still differ over when additional sanctions should be imposed on Tehran, with Merkel preferring to wait until European and UN diplomatic efforts have run their course.

"The top of my agenda is Iran," Bush said as they met on his Texas ranch. "We will continue to work together to solve this problem diplomatically, which means they will continue to be isolated."

Democratic critics such as presidential contender Barack Obama have said the Senate resolution is a "blank check" for Bush to wage war on Iran, which has refused to bow to international demands to halt its uranium enrichment.

Bush and Vice President Dick Cheney have been using bellicose rhetoric against the Islamic republic, with the president warning of the threat of "World War III" if Iran gains the know-how to make nuclear weapons.

Obama reaffirmed Sunday that he would "not hesitate" to open talks with US foes, arguing that the Bush administration was instead "itching to escalate the tensions between Iran and the United States."

"Strong countries and strong presidents speak with their adversaries," he said on NBC television, insisting that Washington should offer not just sticks to Iran "but also the carrots" of enhanced trade and normalized relations.

Democratic White House frontrunner Hillary Clinton has accused Obama of naivete for his willingness to open high-level talks with US enemies.

But Clinton's chief foreign-policy advisor, former UN ambassador Richard Holbrooke, said it was one of Bush's "great failures" to have ignored an Iranian offer of dialogue after the September 11, 2001 attacks.

"The policy with Iran has to be reexamined from the roots up," he said on CNN, arguing that US demands for a halt to uranium enrichment before any talks can start had contributed to an "impossible impasse" with Iran.

Rice, however, said the United States and its European allies had already offered Tehran trade and political incentives to stop its enrichment work.

"I've even said that we would reverse 28 years of policy," she said, referring to a US embargo imposed after Iran's Islamic revolution, and said she would meet her Iranian counterpart "any place, any time, anywhere."

"They just have to give up the fuel cycle, the enrichment and reprocessing that can lead to the technologies that can lead to a nuclear weapon," Rice said.

"So the question isn't why will we not talk to Tehran. The question is, why will Tehran not talk to us?"

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