"We need to be able to work to resolve it, and I hope there will be no steps taken to escalate the situation," Annan said as he met at the White House with US President George W. Bush.

Annan said he hoped Iran would take steps before the UN watchdog International Atomic Energy Agency (IAEA) meets in Vienna next month to decide whether to recommend UN Security Council action.

He urged Iran to "indicate that negotiations are not dead and both sides can come back to the table and find a way out of this crisis."

Washington accuses Tehran of using a civilian nuclear program as cover for trying to develop atomic weapons. Iran denies the charge.

Iran has restarted uranium enrichment work by putting its feedstock gas into centrifuges, defying the West with a program that could make nuclear reactor fuel or atom bomb material, diplomats told AFP Monday.

It came as Iranian President Mahmoud Ahmadinejad insisted his country was not worried about possible sanctions and Tehran said talks in Moscow aimed at finding a compromise to the long-running international standoff would not go ahead as planned later this week.

Uranium enrichment is seen as a red line by the United States and European Union in the dispute over Iran's nuclear program, as it is crucial to making atomic weapons.

Putting uranium hexafluoride (UF6) gas into centrifuges, which distill out enriched uranium, is a major escalation by Iran, and comes amid threats by the Islamic republic to withdraw from the nuclear Non-Proliferation Treaty (NPT).

related report

Nations United Against Nuclear Program In Iran, Rice Says
by Tech. Sgt. Elaine Wilson, USAF Washington DC (SPX) Feb 13 - A "tremendous" coalition of countries remains united in its stance against nuclear weapon development in Iran, a situation sparking increasing international concern, said the nation's senior diplomat today.

"The Iranians now need step back, look at where they are, see that they're isolated on this issue, and return to a state in which they go back and seal the activities that they have begun, ... and get back into negotiations with those who are prepared to offer them a course for civil nuclear power," Secretary of State Condoleezza Rice said on ABC's "This Week."

Rice was referring to the country's resumption of enriched uranium research, which can lead to the production of nuclear weapons.

Iran's president, Mahomoud Ahmadinejad, has publicly disavowed the intent to produce nuclear weapons, claiming the country is trying to produce nuclear energy. However, the president now is saying that Iran is considering a withdrawal from the Nuclear Nonproliferation Treaty, which restricts the possession of nuclear weapons.

"The really remarkable thing over the past several months is there is really now a tremendous coalition of countries saying exactly the same thing to Iran," Rice said. "The 'permanent five' - the United States, Russia, China, Great Britain and France - are united with countries like Brazil and India and others."

And the International Atomic Energy Agency board of governors has reported the Iranians up to the U.N. Security Council, Rice said.

With a consensus among nations, Iran is only isolating itself with its actions, Rice said, adding that Iran still has the option to pursue a peaceful nuclear program.

"The Russians have given them a proposal; the Europeans gave them a proposal," Rice said. "The question is, will they be allowed to have technology that could lead to a nuclear weapon?"

Rice said the answer is clear. "They've been lying to the international community for 18 years," the secretary said. "An Iran with a nuclear weapon would be a threat - a grave threat - to international peace and security."

Rice said it is vital that Iran "get back into good graces with the IAEA and get back into negotiations with those that are prepared to offer them support."

In the meantime, Rice emphasized that the United States remains dedicated to a diplomatic approach, despite reports that the government is considering other avenues, such as a show of force.

"We believe a diplomatic approach as the one we now anticipate ... will give us a way to resolve this problem," the secretary said. "The president never takes any of his options off the table ... but there is a diplomatic solution to this.

Rice then responded to recent comments on the "tallest man in Afghanistan," Osama bin Laden, not being captured or killed yet.

"We are dealing with a figure who has been able to hide, but he's on the run," Rice said. "His organization has been significantly weakened because of the international effort against al Qaeda."

Rice emphasized that bin Laden today is "not the figure who sat for the entire period of the 1990s in Afghanistan with training camps there able to carry out operations able to launch effective attacks against the U.S., against our embassies, against the (USS) Cole and, ultimately, against us with Sept. 11, 2001.

With the support of Pakistan, Saudi Arabia and Afghanistan, "it's a very different situation we face," she said. "Even if it takes us time to find Osama bin Laden, we are breaking up the al Qaeda network."

The ultimate goal is to work toward a "hopeful future," the secretary said. "That ultimately is going to form a different kind of Middle East -- a Middle East that does not spawn the kind of hatred that produced the terrorist attacks of Sept. 11, 2001."

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