German Chancellor Angela Merkel told US President George W. Bush yesterday she would be willing to support a third round of UN sanctions against Iran if Tehran continues to resist demands to halt sensitive nuclear work.
Ms Merkel, in a visit to Mr Bush's ranch in Crawford, also said she would consider possible cuts in her country's brisk trade flows with Iran should other efforts fail to secure Tehran's cooperation over its nuclear program.
Mr Bush agreed with Ms Merkel that diplomacy was the best way to resolve the standoff with Iran.
"We were at one in saying that the threat posed through the nuclear program of Iran is indeed a serious one," Ms Merkel said at a joint news conference with Mr Bush.
"We both share this view, but we also were of the opinion that we think that this issue can be solved through diplomatic means; that the next step, then, obviously, would be a resolution," she said through a translator.
Ms Merkel said she would wait for reports on Iran's nuclear activities from the European Union negotiator and the UN atomic watchdog before making a final decision on sanctions.
Britain, France, Germany, the United States, Russia and China are expected to meet on November 19th to assess reports from European Union foreign policy chief Javier Solana and International Atomic Energy Agency head Mohamed ElBaradei.
"If the reports remain unsatisfactory ... we need to think about further possible sanctions. ... We also have to then talk and agree on further possible sanctions,"Ms Merkel said. She said she would talk with German companies about "further possible reductions of those commercial ties" with Iran.
The West accuses Iran of seeking to develop a nuclear weapon but Tehran says its nuclear program is purely for civilian purposes of generating electricity.
Mr Bush alarmed some European allies last month when he said a nuclear-armed Iran could lead to World War III.
The Bush administration insists it is committed to pursuing diplomacy with Iran, but also says all options are on the table.