"The only thing the coalition will discuss with this regime is their unconditional surrender," he told reporters at a Pentagon briefing.
Rumsfeld said Saddam Hussein's government had been planting rumors that U.S. officials were talking to Iraqi leaders, with the goal of convincing Iraqi citizens that "the coalition does not intend to finish the job."
Speaking directly to the Iraqi public, Rumsfeld denied such rumors and accused Saddam's government of lying.
"There are no negotiations taking place," he said. "There is no outcome to this war that will leave Saddam Hussein and his regime in power."
Commenting on the progress of the war, Rumsfeld said U.S. and British forces are positioned around Baghdad from the north, south and west. "The circle is closing," he said.
The defense secretary said Iraqi Republican Guard units "have been taking a pounding" for several days. "They're being attacked from the air, they're pressured from the ground, and in good time they won't be there," Rumsfeld said.
In other developments:
Appearing with Rumsfeld, Gen. Richard Myers, chairman of the Joint Chiefs of Staff, launched a spirited defense of the U.S. military strategy in Iraq, which has been criticized for underestimating the extent of Iraqi resistance and sending in too few ground troops.
Myers said military critics of the plan are "not being responsible members of the team that put this all together. ... It is not helpful to have those comments."
"This subject is not useful," Myers continued. "It's not good for our troops, and it's not accurate."
He said that Gen. Tommy Franks, commander of the forces in Iraq, has received everything he sought in terms of resources and manpower.
Myers said charges that more troops were needed are "bogus."
Meanwhile, fresh U.S. forces were flowing to the Persian Gulf, including 500 members of an Army cavalry regiment being sent ahead of schedule to help protect U.S. supply lines from Iraqi attack.
The Pentagon said Tuesday that more than 300,000 allied forces were now in the Gulf region, about 250,000 of them American.
In the ongoing air war, U.S.-led forces launched missiles early Tuesday toward Baghdad and the holy Shiite Muslim city of Karbala to the southwest. Among the targets, U.S. officials said, was a complex that serves as the office of the Iraqi National Olympic Committee, where dissidents say Saddam's son Odai runs a torture center.
The Pentagon said U.S. warplanes used more than 3,000 precision-guided bombs on Iraqi targets over the weekend, compared to about 5,000 in the previous week.
Around Basra, more civilians were informing foreign troops about the whereabouts of paramilitary forces and members of Iraqi leader Saddam Hussein's Baath Party, British officials said.
In Nasiriyah, where American forces have met stiff resistance, Brig. Gen. Vincent Brooks said civilians were helping U.S. special forces stage raids and find troops loyal to Saddam.
To the south, Marines said they captured some Republican Guard officers and killed dozens of Iraqi fighters Tuesday during a lengthy battle on the outskirts of the town of Diwaniyah. At least 75 Iraqis were killed in the fighting.
Northeast of Diwaniyah, there was heavy bombing Tuesday near Kut to clear the way for ground forces, a Marine intelligence analyst said. Marine ground forces also have secured an airbase at Qalat Sukkar, southeast of Kut, that is expected to serve as a staging ground.
Other units fought to isolate the holy Shiite city of Najaf in an ongoing effort to protect U.S. supply lines.
British forces in Basra destroyed a number of Iraqi tanks and personnel carriers, rescued two Kenyan truck drivers who had been held by Iraqis since last week and captured an Iraqi general who had provide information about battlefield tactics.
The U.S. military said it was investigating the shooting deaths of at least seven Iraqi women and children by U.S. troops at a checkpoint in southern Iraq on Monday.
Another Iraqi was killed Tuesday in a similar incident, at a checkpoint near the south-central town of Shatra.
Brooks said there had been no change in the rules of engagement after a suicide bombing at a checkpoint killed four soldiers Saturday. Central Command blamed any loss of civilian life on Saddam's regime.
"The blood is on the hands of the regime. If there's a question of morality, it really should go back to the regime," Brooks said.