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.