Bush, German Leader Warn Iran On Nukes

President Bush said Wednesday that diplomacy is still his first choice to solve the nuclear standoff with Iran, but "all options are on the table."

Standing shoulder to shoulder with German Chancellor Angela Merkel for a news conference in Berlin, Mr. Bush addressed Iran's leaders directly, telling them the choice was theirs; "verify that you've suspended your enrichment program and you'll end your isolation," or face the threat of tough new sanctions.

The president is eager to resolve the nuclear standoff with Tehran before his presidency ends. In talks with Merkel on Wednesday, and with other European leaders later in the week, he will be coaxing them to stand in solidarity against Iran and embrace tougher sanctions if the country does not stop its uranium enrichment program.

Appearing outside a villa near Berlin on Wednesday after talks with Merkel, Mr. Bush said Iran's refusal to stop enriching uranium, in compliance with demands made by the United Nations Security Council, had shown the Islamic Republic's leaders to be "unsafe and untrustworthy".

Merkel said if Iran does not agree to suspend its enrichment program, additional sanctions would be needed.

"The offer has been put on the table to Iran, but... if Iran does not meet its commitments, then further sanctions will simply have to follow," she said. "We again said we want to give room for diplomatic solutions, we want to give diplomacy a chance, but we also have to stay on that particular issue."

She said the global community is unified, and that U.N. sanctions have been effective, and that it's important that all of the existing sanctions are implemented.

It was unclear from Merkel's remarks what level of agreement had been reached between the two leaders behind closed doors - whether she had agreed to the same level of punitive sanctions that Mr. Bush envisions should Iran refuse a new incentives package being offered in the coming days by European Union foreign policy chief, Javier Solana.

The incentives package, an updated version of one that Iran ignored a few years ago, was developed by the United States, along with Germany, Britain, France, Russia and China. It would reward Iran for verifiably stopping its enrichment program.

"We'll give diplomacy a chance to work," Mr. Bush said. "If they (Iranian leaders) continue to be completely obstinate, there will be additional sanctions."

Europeans want to wait on stiffer sanctions until after Solana visits Tehran, and Merkel cautioned that any new measures must have the backing of as many members of the global community as possible - including China and Russia, which have resisted such measures in the past.

"Additional measures must not soften the stance on the international stage. The more we back it, the stronger is the effect on Iran," Merkel said.

CBS News correspondent Mark Knoller, traveling with the president, reports that while Merkel shares Mr. Bush's concerns over Iran's nuclear ambitions, convincing her to back tough new sanctions will be difficult given her country's economic ties to Tehran.

Under Merkel, Germany has cut back trade with Iran; German exports to Iran shrank to $5 billion in 2007 from $6.8 billion in 2006. Washington wants Germany to do even more, but German businesses don't want to cut financial ties to Iran.

"German business is not happy," said Julianne Smith, director of the Europe program at the Center for Strategic and International Studies in Washington. "This is going to have political ramifications. She's only going to go so far."

Following Mr. Bush's final U.S.-EU summit Tuesday in Kranj, Slovenia, the leaders issued a joint declaration that said the United States and Europe "are ready to supplement those (previous) sanctions with additional measures" if Iran does not halt enrichment. It also said they would "work together ... to take steps to ensure Iranian banks cannot abuse the international banking system to support proliferation and terrorism."

It was unclear whether this second pledge meant Europeans had signed on for the kind of harsh measures the U.S. favors, such as prohibiting business with Iranian banks, or merely represented a repeat of previous calls for closer monitoring of dealings with them.

Mr. Bush's campaign for stronger sanctions has been bolstered by the International Atomic Energy Agency.

Since beginning an investigation last year into allegations of a secret Iranian nuclear weapons program, the IAEA has asked in vain for substantive explanations for what seem to be draft plans to refit missiles with nuclear warheads, explosives tests that could be used to develop a nuclear detonator, military and civilian nuclear links and a drawing showing how to mold uranium metal into the shape of warheads.

Iran claims its nuclear program is geared toward generating electricity, not bombs, and remains defiant, saying evidence from the U.S. and others purportedly backing the allegations was fabricated.

Aboard Air Force One on Tuesday en route to Germany, national security adviser Stephen Hadley told reporters that the president's strategy was to make sure that all the European partners see eye to eye on the latest offer. At the same time, he said the parties need to agree that if the Iranians reject the offer being presented by Solana, then "we need to turn up the pressure."

Merkel and other European leaders want to convince the American president this week that they take the threat from Iran seriously. At the same time, they seek to restrain hard-liners who want the United States or Israel to use military force against Iran - an option Mr. Bush left plainly "on the table" Wednesday.

Global warming, Afghanistan and relations with Russia also were expected topics at Mr. Bush's meeting with Merkel at Schloss Meseberg, the German government's main guesthouse. After a countryside bike ride that seemed to invigorate Mr. Bush, he and Merkel had breakfast and then took a camera-ready stroll through the formal, manicured gardens next to the cream-colored castle.

Mr. Bush seemed to want to stay as far as possible from the line of media, steering Merkel down a path that took them away. But minutes later, Merkel steered them back and the two chatted briefly with reporters before moving inside.