Germany, France Threaten New Iran Sanctions

`I think the new U.S. administration will make its approach towards Iran clear to us in coming months,` Merkel said

Iran will face tougher sanctions if it does not meet the demands of major powers to rein in its nuclear programme, the leaders of Germany and France said on Saturday.

Chancellor Angela Merkel said Berlin hoped for a diplomatic solution to the dispute, referring to an offer by U.S. President Barack Obama to hold direct talks with Tehran on the nuclear issue, an option his predecessor George W. Bush had ruled out.

"I think the new U.S. administration will make its approach towards Iran clear to us in coming months," Merkel told the annual Munich Security Conference in a speech.

"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 and 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 added.

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

Sarkozy and Merkel were speaking at an annual gathering of leaders and defence experts in Munich, where U.S. Vice President Joe Biden gave a speech on the foreign policy priorities of the Obama administration.

U.S. WILLING TO TALK

Biden said the international community must work together to convince Iran to forgo the development of nuclear weapons.

"We are 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 your illicit nuclear programme and support for terrorism and there will be meaningful incentives," he said.

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 towards a diplomatic solution with Iran.

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.