Obama demands Iran come clean on nuclear program

PITTSBURGH (Reuters) - Bolstered by support from other world powers, President Barack Obama put Iran on notice on Friday it must come clean about its nuclear program in talks next week or else face "sanctions that have bite."

Obama issued the stern warning at the end of a Group of 20 summit in Pittsburgh where he and the leaders Britain and France accused Iran of building a secret nuclear fuel plant in violation of international rules.

"The international community has spoken. It is now up to Iran to respond," Obama said at a closing news conference.

The fresh disclosure of the scope of Iran's disputed nuclear program added a new sense of urgency to Tehran's much-anticipated talks with the United States and five other powers on October 1 in Geneva.

Earlier in the day, Obama stood with British Prime Minister Gordon Brown and French President Nicolas Sarkozy in lodging the accusation that Iran for several years had been constructing a second uranium enrichment plant underground near the holy city of Qom.

Obama said the United States and its allies were "absolutely" confident of their intelligence on the clandestine nuclear site.

A defiant Iranian President Mahmoud Ahmadinejad insisted the nuclear plant was within the parameters of the U.N. nuclear watchdog's rules and that he would have no problem allowing international inspections.

"It's not a secret site," Ahmadinejad told a news conference in New York, saying the United States, Britain and France would regret their accusations.

Ahmadinejad said Israel "wouldn't dare to attack" Iran and that Iranians were able to defend themselves.

Iran acknowledged the existence of the facility for the first time on Monday in a letter to the International Atomic Energy Agency, a belated disclosure U.S. officials said was meant to beat Western governments to the punch.

Obama said he preferred the diplomatic track in dealing with Iran but added "we do not rule out any options."

"When we find that diplomacy does not work, we will be in a much stronger position to, for example, apply sanctions that have bite," Obama said.

Britain, France and Germany also raised the specter of tough new sanctions, and Russia -- previously reluctant to go along with further penalties -- showed greater willingness to consider the prospect. China too expressed concern about Iran's nuclear activities while calling for a negotiated solution.

(Editing by Doina Chiacu)