Bush said he would discuss Iran's nuclear activities with China's President Hu Jintao, who has been cool toward sanctions, during his U.S. visit this week.

Asked if his options included planning for a nuclear strike, Bush said: "All options are on the table. We want to solve this issue diplomatically and we're working hard to do so."

But a meeting of major powers in Moscow ended without consensus despite strong U.S. pressure for international sanctions. Washington believes Iran is trying to build bombs but Tehran says it is only developing nuclear energy.

The meeting of deputy foreign ministers of the U.N. Security Council's permanent members -- The United States, Britain, France, China and Russia -- plus Germany, was called after Tehran declared last week that it had enriched uranium and was aiming for industrial-scale production.

The No. 3 State Department official, Nicholas Burns, argued that sanctions should be imposed on Iran, but Russia and China are resisting and the parties came to no agreement, said State Department spokesman Tom Casey in Washington.

"Burns raised the issue of some form of sanctions and there will need to be further discussions on this," he said after being briefed by U.S. officials about the meeting.

The United States, which already enforces its own sweeping sanctions on Iran, wants the Security Council to be ready for strong diplomatic action, including measures such as a freeze on assets and visa curbs on Iranian officials.

Tehran had vowed to continue its pursuit of nuclear technology, whatever the meeting's outcome.

"Whatever the result of this meeting might be, Iran will not abandon its rights," Iran's Foreign Ministry spokesman Hamid Reza Asefi said before the meeting ended.

State Department spokesman Sean McCormack stressed that the goal of the Moscow meeting was to make preparations for decisions to be taken in various capitals.

IAEA REPORT DUE

The International Atomic Energy Agency is due to report at the end of the month on whether Iran is complying with U.N. demands that it halt uranium enrichment.

Iran's defiance of world pressure to halt its program drove oil prices to a record high of $72.64 a barrel, raising fears of a cut in supplies from the world's fourth biggest crude exporter.

Speculation about a U.S. attack has mounted since a report in New Yorker magazine said this month the Bush administration was considering the option of using tactical nuclear weapons to knock out Iran's underground nuclear sites.

China, which sent an envoy to Iran to try to defuse the standoff, repeated a call for a negotiated solution. "We hope all sides will maintain restraint and flexibility," Chinese Foreign Ministry spokesman Qin Gang said in Beijing.

Russia restated its opposition to punitive action. "We are convinced that neither the sanctions route nor the use of force route will lead to a solution of this problem," said Foreign Ministry spokesman Mikhail Kamynin, according to an Itar-Tass news agency report.

Russian Foreign Minister Sergei Lavrov urged Iran to suspend its research and development efforts to enrich uranium in a telephone conversation with Iranian Foreign Minister Manuchehr Motaki on Monday, Interfax said.

U.S. Sen. Joe Lieberman, a member of the Senate Armed Services Committee, told the Jerusalem Post that the United States probably could not destroy Iran's nuclear program but could attempt to set it back by strikes as a last resort.

"I think the only justifiable use of military power would be an attempt to deter the development of their nuclear program if we felt there was no other way to do it," he said.

Iranian President Mahmoud Ahmadinejad, speaking at an annual military parade, said the army was ready to defend the nation. "It will cut off the hands of any aggressors and will make any aggressor regret it," he declared.

While refusing to drop its right to enrich uranium for peaceful use, Iran has offered to work with the IAEA.

The U.N. nuclear watchdog says it has been unable to verify that Iran's nuclear program is purely civilian but has found no hard proof of efforts to build atomic weapons.

IAEA inspectors are due in Iran on Friday to visit nuclear sites, including one at Natanz where Iran says it has enriched uranium to 3.5 percent, the level used in nuclear power plants.

Experts say it would take Iran years to produce enough highly enriched uranium for one bomb from its current 164 centrifuges. But Iran says it wants to install 3,000 centrifuges, which could make enough material for a warhead in one year.