US President George W. Bush on Thursday ruled out direct talks with Teheran during his remaining months in office, calling such engagement a mistake that would confuse regional allies and discourage reformists in Iran. "What's lost by embracing a tyrant who puts his people in prison because of their political beliefs? What's lost is it will send the wrong message," Bush said at a press conference in response to a question on his willingness to speak with political leaders in places such as Iran and Cuba. Bush said he had no intention of changing his policy and engaging with leaders of rogue countries, though he has received much criticism in Democratic circles for taking that position, particularly from those running for president. "I just remind people that the decisions of the US president to have discussions with certain international figures can be extremely counterproductive," Bush added, in a veiled warning to those opponents. "It can send chilling signals and messages to our allies; it can send confusion about our foreign policy; it discourages reformers inside their own country. And in my judgment, it would be a mistake." As the debate on engagement with enemy states has raged in the presidential primaries, the question to Bush on such overtures - the only query in the press conference to deal directly with Iran - highlighted the dramatic shift in US policy options toward Iran in recent months. Bush's last press conference, in December following the release of the US National Intelligence Estimate that found Iran had halted its nuclear weapons program, was dominated by questions on US policy toward the country. Questions also came up at the previous press conference in October, when Bush warned about the potential for "World War III" because of Iran and was asked about possible military action against the Islamic Republic. "Nobody's talking about military action anymore. I haven't seen anybody [discuss it]," said John Calabrese, a Washington-based Middle East Institute scholar who edits the Middle East Journal, speaking of both media and government representatives here. Earlier in the week, US Under Secretary of State Nicholas Burns, who has held the Iran portfolio at the State Department, spoke before his imminent departure from the government. Asked about Iran, Burns said, "I don't think that conflict with Iran is inevitable. I think there's plenty of space for diplomacy." He also said, "I think that this is going to be a drama that plays out well into 2009 and beyond." A report in Mother Jones noted that his earlier statements on the subject were "darker, and more deliberately calibrated to convey an underlying threat. Burns used language then about there not being endless amounts of time for diplomacy and to see Teheran's behavior change." Now, the piece said, "the message seemed to suggest a longer horizon." Iran expert Ilan Berman of the American Foreign Policy Council said Burns's comments were in keeping with "the growing perception that the administration is just kicking the can down the road" for the next administration to deal with. Burns did stress the importance of a third UN Security Council resolution sanctioning Iran, which the US hopes to see pass in the coming days. But analysts such as Berman said whatever did pass would be lacking "teeth," in part because the National Intelligence Estimate reduced the pressure on reluctant countries to take hard steps against Iran. "Now that there's no military option, there's no credible reason for those countries to build up that effort," Berman said. Calabrese attributed the removal of the military option to the trouble the Bush administration would have justifying an attack that was sure to be unpopular domestically and internationally. "The apparent lack of evidence indicating that the nuclear weapons threat is immediate deprives the Bush administration of the cloak of legitimacy that it needs to conduct a military strike any time soon," he said. Berman said that while he had long considered a US strike "unlikely," it was "the threat and the possibility that we have to resort to that which was crucial." Now, he said, the perception of that threat has changed. One area of American action on Teheran that has continued full steam ahead is the US Treasury effort to hurt Iran's economy by acting against its banks and officials involved in proliferation and terrorism, as well as scaring off investors because of the risk of doing business there. Speaking to the Washington Institute for Near East Policy, US Assistant Secretary of the Treasury Patrick O'Brien detailed on Wednesday the American approach, which he described as having "an impact" by also encouraging allies to avoid involvement with rogue states and following the United States's lead. "There hasn't been a drop-off in private sector pressure on Iran since the NIE," said Michael Jacobson, an expert in finance and terrorism with the Washington Institute. He said private companies had the same concerns about the risk of dealing with Iran and finding themselves complicit in terrorism and proliferation that they did before the intelligence estimate was released. Jacobson also said financial measures had been the most effective tool against Iran to date, and that they could ultimately be successful because there were many options for financial pressure yet to be applied. However, he added that those options could be limited by the climate created by the National Intelligence Estimate. "There's still more that could be done by governments, which would make financial pressure heavier," he said. Even a weak UN sanctions resolution could offer progress on that front, Jacobson argued. "Whatever the resolution says, if there is a unanimous resolution, and particularly if Europe follows with really strong [independent sanctions], it would be a sign that even if Iran thought this would go away with the NIE, it's not, and that could help in reviving the financial pressure at the government level."