Iran was warned of crippling sanctions by US Secretary of State Hillary Clinton if it did not end its nuclear program after Tehran offered talks with major powers.

Clinton told US lawmakers she was under no illusions about the difficulty of engaging Iran successfully.

“We are also laying the groundwork for the kind of very tough ... crippling sanctions that might be necessary in the event that our offers are either rejected or the process is inconclusive or unsuccessful,' Clinton told the House of Representatives foreign affairs committee.

Clinton's tough talk came as Iran, in an official statement, said it believed discussions could resolve disputes between the Islamic republic and the West, but it said Tehran would press ahead with its work to develop atomic energy.

'The Islamic Republic of Iran ... welcomes constructive and fair talks based on mutual respect and believes current problems could be resolved through talks,' the statement said.

'The Islamic Republic of Iran will continue its nuclear activities in an active interaction with the (United Nations) International Atomic Energy Agency in the framework of the NPT (Non-Proliferation Treaty) like other agency members,' it said.

The statement was Tehran's response to an invitation this month by six world powers to discuss the nuclear issue, according to Iranian state television.

Last week, President Mahmoud Ahmadinejad said Iran had prepared proposals to end the dispute, without giving details.

Clinton said the US believed its decision to engage Iran over its nuclear program and other issues would increase US leverage among other major powers to impose sanctions if talks fail.

More leverage

China and Russia have balked at more punitive measures above the three rounds of U.N. sanctions already imposed against Tehran.

'We actually believe that by following the diplomatic path we are on, we gain credibility and influence with a number of nations who would have to participate in order to make the sanctions regime as tight and crippling as we would want it to be,' Clinton told U.S. lawmakers.

Engaging Iran marked a significant shift in US policy under President Barack Obama, whose predecessor, George W Bush, shunned direct talks as long as Tehran continued with enrichment activity.

The US and its Western allies suspect Iran is aiming to develop nuclear bombs under the cover of a civilian program and want it to halt sensitive uranium enrichment. Iran rejects the allegation and says it will not bow to pressure.

While saying it would welcome talks, Iran also criticized the powers' statement, issued after a meeting in London earlier this month, saying parts of it were contradictory and insulting by referring to a dual track strategy of carrots and sticks.

Iran has repeatedly dismissed demands that it stop enriching uranium, which can have both civilian and military uses. Tehran says its activities are aimed at producing electricity so that it can export more of its gas and oil.

Negotiations with Iran over its nuclear program come at a delicate time as Washington seeks the release of Iranian-American reporter Roxana Saberi, who was jailed last weekend on charges of spying for the US.

'Roxana Saberi, who is being held in an arbitrary and terribly unfair, unprecedented, unjustified way, should be able to come home. And we hope that we can achieve that,' Clinton said at the hearing.

She also reiterated the United States wanted information about a missing ex-FBI agent, Robert Levinson, who has not been heard from since he went to Iran two years ago.
'We are going to continue to press this at every turn,' said Clinton of the Levinson case. – Reuters