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Iran said Saturday the United States was not in a position to take military action against it and urged Washington and its allies to engage in dialogue.
"We do not see America in a position to impose another crisis on its tax payers inside America by starting another war in the region," Iranian Foreign Minister Manouchehr Mottaki told reporters.
Mottaki was responding to US Vice President Dick Cheney, who renewed Washington's warning to Iran earlier Saturday that "all options" were on the table if Teheran continues to defy UN demands to halt uranium enrichment.
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At a joint news conference with Prime Minister John Howard during a visit to Australia, Cheney said the United States was "deeply concerned" about Iran's activities, including the "aggressive" sponsoring of terrorist group Hizbullah and inflammatory statements by President Mahmoud Ahmadinejad.
Cheney said top US officials would meet soon with European allies to decide the next step toward planned tough sanctions against Iran if it continues enriching uranium.
"But I've also made the point, and the president has made the point, that all options are on the table," he said, leaving open the possibility of military action.
The International Atomic Energy Agency reported on Thursday that Iran had ignored a UN Security Council ultimatum to freeze its uranium enrichment program and had expanded the program by setting up hundreds of centrifuges.
Enriched to a low level, uranium is used to produce nuclear fuel but further enrichment makes it suitable for use in building an atomic bomb.
The IAEA report came after Wednesday's deadline of a 60-day grace period for Iran to halt uranium enrichment. Iran has repeatedly refused to halt enrichment as a precondition to negotiations about its program.
Mottaki said negotiations, not threats, were the only way left to resolve the standoff over Iran's nuclear activities and urged the US and its allies to return to dialogue when they are scheduled to meet in London next week.
"The only way to reach a solution for disputes is negotiations and talks. Therefore, we want the London meeting to make a brave decision and resume talks with Iran," Mottaki told reporters during a press conference with Bahrain's visiting foreign minister.