Rice, at a news conference, declined to say whether the United States has the necessary votes at the U.N. Security Council to punish Iran or would even try at this stage.
But she said
"I don't think it serves anybody's purpose to have a nuclear-armed Iran," Rice said.
Iran still believes the standoff over its nuclear program could be resolved diplomatically, a senior Iranian official said Thursday in a surprisingly mild response to the European decision to push for U.N. Security Council action.
"Iran still believes diplomacy could be productive," Supreme National Security Council spokesman, Hossein Entezami, said in a statement broadcast on state television hours after the foreign ministers of Britain, France and Germany said they had decided to stop negotiating with Iran and refer the country's nuclear program to the U.N. Security Council.
"Iran pursues its nuclear research activities in the framework of the International Atomic Energy Agency regulations and under the supervision of the agency. So there is no reason for challenging Iran's rights in the field of nuclear fuel," Entezami said.
While Iran frequently denounces the West when it comes under pressure, Entezami avoided aggressive language and urged the Europeans not to challenge the Iranian people's demand for nuclear energy. He said the West would be wrong to lead diplomatic channels to a dead end through "unwise decisions."
Meanwhile, U.N. Secretary-General Kofi Annan said Iran's top nuclear negotiator told him that Tehran is interested in "serious and constructive negotiations" with Britain, France and Germany.
During a 40-minute telephone conversation, he said, Ali Larijani told him Iran wanted to resume negotiations with the Europeans, but this time with a deadline.
"He affirmed to me that they are interested in serious and constructive negotiations but within a time frame, indicating that the last time they did it for 2 1/2 years and no result," Annan told reporters after a private lunch with Security Council members.
A senior Iranian nuclear negotiator, Java Avid, said the Europeans should step back from referring Iran to the U.N. security council. Referral, he told state television, would not change Iran's behavior, but it would lead to a tough response.
"It forces Iran to feel it is in an emergency and it contributes to hardline policies," Avid said.
Earlier Thursday in Europe, the British, French and German foreign ministers said Thursday that negotiations with Iran over its nuclear program had reached a "dead end" and the Islamic republic should be referred to the U.N. Security Council.
The action came two days after Iran broke U.N. seals at a uranium enrichment plant and said it was resuming nuclear research after a two-year freeze.
Enriched uranium can be used as a fuel for both nuclear energy and nuclear weapons. Iran says its nuclear program is only for fuel.
In a joint statement, the diplomats cited Iran's "documented record of concealment and deception" and charged that its government seems "intent on turning its back on better relations with the international community."
"From our point of view, the time has come for the U.N. Security Council to become involved," German Foreign Minister Frank-Walter Steinmeier said after meeting with his French and British counterparts and the European Union's foreign policy chief, Javier Solana.
The Bush administration, meanwhile, arranged to have Undersecretary of State Nicholas Burns go to Britain, France and Germany next week to coordinate strategy. Burns also will hold talks in India, said a senior U.S. official who spoke on condition of anonymity because the State Department was not ready to issue a formal statement.
While Burns will be consulting in Europe, Solana plans to be in Washington to coordinate with Bush administration officials.
Steinmeier said the three countries would inform the board "that our talks with Iran have reached a dead end."
Solana said the EU and national governments were left with no choice but to call for Iran's referral. But he would not rule out a new round of negotiations with Tehran.
Steinmeier stressed that the Europeans remain ready to solve the problem "diplomatically, multilaterally and by peaceful means."
Iran's move increased worries in the United States and other Western countries that Iran intends to produce nuclear weapons, while Russia, a longtime Iran ally, indicated it could reverse its opposition to bringing Tehran before the Security Council, which could impose sanctions.
There were no comments from Britain's Jack Straw, France's Philippe Douste-Blazy and Germany's Frank-Walter Steinmeier on their way into the meeting, but a German Foreign Ministry spokeswoman said the talks started. European Union foreign policy chief Javier Solana also attended.
Straw told reporters before leaving for Berlin it was "highly probable" Iran would be referred to the Security Council.
Russia and China, both members of the IAEA board that would have to approve referring Iran to the Security Council, have previously opposed the idea.
Russian Foreign Minister Sergey Lavrov said Russia, the United States, the European Union and China would discuss the issue in London next week.
He told Ekho Moskvy radio that Iran's latest move did not violate international law — but also said that Moscow did not exclude the possibility of turning the Iranian dossier over to the Security Council.
"It causes concern that Iran is opting out of its moratorium in the absence of answers to questions, serious questions" from the IAEA, Lavrov said. "Our main task is to persuade Tehran through joint efforts to return to the moratorium."
China on Thursday urged more talks, without saying whether it would back taking Tehran to the Security Council.
China "hopes that all parties concerned can exercise restraint and resolve this within the IAEA framework and through peaceful negotiations," Foreign Ministry spokesman Kong Quan said in Beijing. "We firmly believe this serves the interests of all parties concerned."
The Security Council in recent years has moved toward imposing targeted measures — such as arms embargoes against countries and rebel groups, travel bans and asset freezes — that minimally impact the general population. Blanket sanctions imposed on Iraq after its 1990 invasion of Kuwait seriously affected the entire population.
However, enforcement of U.N. sanctions has proven very difficult in many countries.
In the case of Iran, the Security Council likely would increase the pressure gradually, starting with a condemnation and demanding that Iran comply with IAEA decisions. If Iran did not respond positively, Western envoys almost certainly would push for further measures, a code word for sanctions, or at minimum threaten them.