The US President, George Bush, has made it clear that Washington could not accept a nuclear-armed Iran, which, he said, would be "very destabilising" in the region and beyond.

The US Secretary of State, Condoleezza Rice, said in Brussels on Wednesday that Iran should understand that it faced referral to the UN Security Council, where it would face sanctions, unless it accepted proposals put to it by Britain, France and Germany to abandon permanently its uranium enrichment program.

Mr Bush said on Wednesday that Iran had to know that the "free world is working together to send a very clear message: don't develop a nuclear weapon".

"The reason we are sending that message is because Iran with a nuclear weapon would be a very destabilising force in the world," he said at the White House during a meeting with the visiting President of Poland, Aleksander Kwasniewski.

Iran's President, Mohammad Khatami, immediately rejected the suggestion that Tehran was intent on developing nuclear weapons and said it wanted to develop a nuclear program for peaceful purposes only.

"We will never abandon this program," he said. He warned that Iran would end talks with the European three, which resumed in Geneva on Tuesday, if America stayed on the sidelines of the negotiations and issued what he characterised as threats.

Dr Rice, after talks with NATO foreign ministers, urged European negotiators to take a tough line with Iran. Without spelling it out, she seemed to be suggesting the Europeans needed to make it clear to Tehran that unless it took the deal on offer - which would see increased economic aid to Iran together with trade opportunities - UN sanctions would be inevitable.

"I think a diplomatic solution is in our grasp if we have unity of message and unity of purpose," she said. At a news conference, she repeatedly refused to set a time limit on the negotiations and said there was no military option on the table "at this time". "The Iranians know what they need to do. The Iranians have to be held to their international obligations. We haven't set any timetables."

France and Germany have urged the US to join the negotiations with Iran, but Washington has refused, saying US sanctions against Iran have been in place for more than 20 years and it has "dealt itself out" of negotiations, as Mr Bush once put it. In France and Germany, the suspicion is widespread that the US wants more than a halt to Iran's nuclear program; it sees Iran as the main sponsor of terrorism in the world, and wants the regime overthrown.

Iran remains a potential flashpoint because the US is determined that Tehran cannot possess nuclear weapons, but it remains unclear what that determination means. What if these negotiations fail? And what if Russia or China exercises its veto at the Security Council - which seems more than possible - and the move to impose sanctions fails? No one knows.