The United States says it is prepared to join European nations in direct talks with Iran on Tehran's nuclear program, if Iran stops enriching uranium.
The official Iranian news agency, IRNA, called the U.S. offer a "propaganda move," saying it is not in Iran's interest to halt uranium enrichment.
President Bush said Wednesday it is important for Washington to take the lead in trying to end the dispute over Iran's nuclear program.
Secretary of State Condoleezza Rice said the U.S. is committed to a diplomatic solution, but that Washington will keep all options open if Tehran continues to enrich uranium.
The European Union welcomed the U.S. offer. European officials said it strengthens an incentives package for Iran proposed by Britain, France and Germany. Their foreign ministers will meet Thursday in Vienna with officials from the U.S., Russia and China to discuss the package.
Punitive measures are also expected to be discussed at the meeting in Vienna. China and Russia have opposed U.N. Security Council sanctions. But a senior U.S. official said Wednesday that China and Russia have agreed to seek sanctions if the U.S. offer to join the talks fails.
The Vienna-based International Atomic Energy Agency also welcomed the U.S. announcement. The United States has not held official direct talks with Iran since the two countries cut diplomatic ties in 1979.