US President George W. Bush and European allies on Tuesday threatened tougher sanctions to squeeze Iran's finances and derail its potential pursuit of a nuclear weapon. Bush said the prospect of a nuclear-armed Iran would endanger world peace. "They can either face isolation, or they can have better relations with all of us," Bush said of Iran's leaders while capping his final European Union-US summit. Bush and EU leaders embraced new financial sanctions against Iran unless it verifiably suspends its nuclear enrichment. They said Iran must fully disclose any nuclear weapons work and allow the International Atomic Energy Agency to verify that work. Iran is also under fire for defying three sets of UN Security Council sanctions and continuing to enrich uranium - which can generate both nuclear fuel and the fissile material for the core of nuclear warheads. Iran insists that it has only civilian uses in mind for its nuclear program. The president flatly said Iran "can't be trusted with enrichment." "A group of countries can send a clear message to the Iranians," Bush said. "And that is: we're going to continue to isolate you, we'll continue to work on sanctions, we'll find new sanctions if need be if you continue to deny the just demands of a free world." The summit, consisting of about three hours of meetings and a working lunch, took place in a modern glass building on the vast Brdo grounds in the shadow of Slovenia's jagged mountain peaks. The president had a long list of issues to cover with his European counterparts, but Iran seemed to dominate. Six world powers - the US, Russia, China, Britain, Germany and France - are developing a package of new penalties and incentives aimed at reining in Teheran's alleged atomic ambitions. The EU's foreign policy chief, Javier Solana, plans to visit Iranian leaders soon in Teheran to appeal to them to accept negotiations over the nuclear standoff. Bush's national security adviser, Stephen Hadley, said that Solana will convey that message when he travels there, adding that Iranian President Mahmoud Ahmadinejad was not expected to be among those consulted. The plan is to figure out a way to make the Iranian people aware of the offer, Hadley told reporters traveling with Bush to Germany, where the president's plane landed Tuesday afternoon. He said officials want to demonstrate to the Iranian people that acceptance of the offer would end their isolation. The package involves concrete political, economic and diplomatic benefits including support for a peaceful nuclear energy program, Hadley added. "All of this is available if they suspend the enrichment and come to the table," he added. "On the one hand, there is a way out for the Iranian people. On the other hand, as the president said, if they do not take it, then the Iranian people need to understand that the choice their regime is making is going to result in increasing isolation of the Iranian regime and, regrettably, the Iranian people as well." He also said the EU and the US are on the same page in stepping up pressure on Iran. Bush and the heads of the EU, a political and economic coalition of 27 countries that works to promote security and commerce across the continent, called on Teheran to stop its support for terrorist organizations destabilizing the Mideast. The statement said the US and the EU would work to ensure that "Iranian banks cannot abuse the international banking system to support proliferation and terrorism." It was unclear whether the newly stated concern over Iranian banks meant that Europeans had signed on for the kind of tough measures the US favors, such as banning business with Iranian banks, or merely represented a repeat of previous calls for closer monitoring of dealings with them. The Bush administration has warned that Iran is using an array of deceptive practices to hide involvement in nuclear proliferation and terrorist activities. Iran insists that it has only civilian uses in mind for its nuclear program. Yet it is under fire for defying three sets of UN Security Council sanctions and continuing to enrich uranium. Iran has also stonewalled attempts by the IAEA to delve into allegations that several Iranian projects appear to represent different components of a nuclear weapons program. "A mutually satisfactory, negotiated solution remains open to Iran," the statement said. But the leaders also said that they would fully implement UN sanctions against Iran and were "ready to supplement those sanctions with additional measures." Bush warned that if Iran ends up with a nuclear weapon, "the free world is going to say why didn't we do something about it at the time? ... Now's the time for there to be strong diplomacy." Iran's central bank, also known as Bank Markazi, is involved in these deceptive acts, according to the US government. The White House has been looking at new steps to cut off more Iranian banks from the international financial system and has been seeking backing from European allies. Tensions over Iran are only rising. Transportation Minister Shaul Mofaz warned Friday that Israel will attack Iran if it does not abandon its nuclear program. Prime Minister Ehud Olmert distanced himself Sunday from the statements, but did not explicitly reject them. "If you were living in Israel you'd be a little nervous, too," Bush said. "Now is the time for all of us to work together to stop them."