West threatens Iran sanctions, offers talks

MUNICH, Germany (Reuters) - Western powers said on Saturday Iran risked isolation and more sanctions if it did not comply with demands to rein in its nuclear program, but Washington also reaffirmed its offer for talk with Tehran.

Speaking at the Munich Security Conference during his first trip to Europe as U.S. vice president, Joe Biden said the international community had to work together to convince Iran to forgo the development of nuclear weapons.

"We will be willing to talk to Iran, and to offer a very clear choice: continue down your current course and there will be pressure and isolation; abandon the illicit nuclear program and your support for terrorism and there will be meaningful incentives," Biden said.

Biden's comments chimed with remarks by German Chancellor Angela Merkel, who said Berlin hoped for a diplomatic solution to the dispute, but added:

"I think the new U.S. administration will make its approach toward Iran clear to us in coming months....We are ready to walk this path together. But we are also ready for tougher sanctions if there is no progress."

French President Sarkozy told the same conference there was no alternative to tightening sanctions against Iran if it does not meet western demands. He called on Russia to cooperate with other powers on such a move. "We need the Russians to help so that sanctions against Iran are effective," Sarkozy said.

"We have only one solution left, reinforce sanctions against Iran and link Russia to this process...It is up to Russia to decide which face it wants to show. If it wants peace it should show it. If it wants to be a (global player), it should help us with Iran," he said.

Sarkozy said Iran's announcement it had launched a satellite into orbit for the first time was "extremely bad news."

LARIJANI-SOLANA TALKS

Ali Larijani, the speaker of Iran's parliament, told the conference on Friday the new White House could rebuild some of the bridges that had been destroyed by the Bush administration.

But he said this required a "pragmatic strategy based on fair play" and he questioned whether a change of tone from Obama really meant the United States was prepared to work toward a diplomatic solution with Iran.

EU foreign policy chief Javier Solona, who met Larijani for talks on the sidelines of the conference, called Washington's offer of talks a "very, very important change."

"The Iranians have to think very very carefully about the meaning of that and contribute also with a positive response," Solana, who has led Western negotiation efforts with Iran, told reporters in Munich.

An EU diplomat, referring to the talks with Larijani, said: "(Larijani) was in a very, very good mood -- very tranquil -- they know that something is moving so they have to push for it."

The U.N. Security Council has imposed three rounds of sanctions on Iran for refusing to suspend uranium enrichment. Western powers suspect the work is aimed at building an atomic bomb. Tehran says it is for peaceful power generation only.

(Addtional reporting by David Brunnstrom)