US will back new Iran sanctions

The US wants a new resolution on Iran agreed 'with some dispatch'

US Secretary of State Condoleezza Rice has said there is a "very strong case" for a third round of sanctions on Iran over its disputed nuclear programme.

She spoke as the UN nuclear agency said it could offer no "credible assurances" that Iran was not building a bomb.

UN Security Council members the US, UK, China, France and Russia meet on Monday in Washington to mull their next step.

But Iran's top nuclear negotiator said the UN report backed Tehran's claim its nuclear programme was peaceful.

Tehran refuses to stop enriching uranium, insisting its work is aimed purely at generating electricity.

Travel bans

The International Atomic Energy Agency (IAEA) report did praise Iran for granting its inspectors access to previously off-limits sites, but said it remained evasive on key issues.

Tehran says its nuclear programme is for civilian purposes

The nuclear watchdog struck a deal last August with Iran on a timetable to resolve questions over aspects of its past nuclear activities.

But Friday's report said Tehran had evaded a proper response to claims it had made secret efforts to "weaponise" nuclear material.

It had also ducked questions about alleged high explosives testing and design work on a missile warhead, the IAEA found, noting: "This is a matter of serious concern."

Iran was also still openly enriching uranium in defiance of UN resolutions and testing advanced centrifuges to speed up the process, said the inspectors.

The US secretary of state said: "This report demonstrates that whatever the Iranians may be doing to try to clean up some elements of the past, it is inadequate given their current activities.

"What we all have to worry about... is the future in which Iran could start to perfect the technologies that could lead to a nuclear weapon."

Iran's chief nuclear negotiator Saeed Jalili told reporters: "This report showed that our activities are peaceful."

But BBC diplomatic correspondent Jonathan Marcus says the IAEA findings are definitely not a clean bill of health.

On Thursday, Britain and France introduced a UN Security Council resolution - a draft of which was approved last month - with support from the US, Russia, China and Germany.

It seeks to expand the number of Iranian companies targeted by sanctions and impose travel bans on certain Iranian officials.

A declassified US intelligence report last December judged that the Iranians had put a nuclear weapons program on hold in 2003.

But the US, Israel and others contend Iran's continued advances in the crucial centrifuge work will eventually give it a capability to build a bomb.

Bush addresses US economy fears

Mr Bush also warned Iran over its nuclear plans

President George W Bush has admitted US economic growth is slowing, but in his final State of the Union address urged Americans to have long-term confidence.

The president acknowledged that the US was facing "uncertainty".

A $150bn (£76bn) stimulus plan negotiated with Congress would help, he said, and must be passed soon.

Mr Bush also said his troop "surge" in Iraq was succeeding after a long and costly war, and that al-Qaeda was "on the run" and would be defeated.

He called on Iran's leaders to cease their "support for terror abroad", although he said the US respected the country's people.

Democratic House Speaker Nancy Pelosi and Senate Majority Leader Harry Reid said that while they agreed with Mr Bush on the need for a bipartisan approach, he "offered little more than the status quo".

"At a time when our economy is on shaky ground and our leadership around the world is eroding, the status quo won't do," they said in a joint statement.

Oil dependence

Mr Bush acknowledged that the US was "undergoing a period of economic uncertainty", but sought to reassure the nation.

"At kitchen tables across our country, there is concern about our economic future," he said.

But, he added: "In the long run, Americans can be confident about our economic growth."

Mr Bush urged Congress not to expand the economic stimulus package beyond what had been agreed, or risk derailing it. He also urged lawmakers to make his tax cuts permanent.

Echoing a theme of his 2006 address, when he spoke of the US being "addicted to oil", Mr Bush spoke about the importance of US energy independence.

"Our security, our prosperity and our environment all require reducing our dependence on oil," he said.

Mr Bush also urged Tehran to suspend its nuclear enrichment programme and "come clean" about its intentions.

He continued: "But above all, know this: America will confront those who threaten our troops, we will stand by our allies, and we will protect our vital interests in the Gulf."

'American response'

On Iraq, Mr Bush acknowledged that the "enemy is still dangerous and more work remains" to be done.

But he praised the work of American and Iraqi forces in achieving "results few of us could have imagined just one year ago", and assured Americans that al-Qaeda "will be defeated".

He urged Congress to "meet its responsibilities to these brave men and women by fully funding our troops".

Mr Bush said that as a result of progress in Iraq and a transition of operations to Iraqi forces, more than 20,000 troops would be returning to the US in the coming months.

Mr Bush said 20,000 troops would be withdrawn in the coming months

In the official Democratic reply to the president's speech, Kansas Governor Kathleen Sebelius said: "In this time, normally reserved for the partisan response, I hope to offer you something more: an American response.

"There is a chance, Mr President, in the next 357 days, to get real results and give the American people renewed optimism that their challenges are the top priority."

But the leading Democratic presidential candidates, Senators Barack Obama and Hillary Clinton, took much tougher lines.

Mr Obama said Mr Bush's speech was full of empty rhetoric, and criticised his "failed politics and policies of the past".

Mrs Clinton said Mr Bush had only offered "more of the same: a frustrating commitment to the same failed policies".

The two rival Democrats have been fighting a bitter campaign for the candidacy, and although they sat only metres away from each other in Senate for the address, they did not speak.

At one point, Mrs Clinton reached across to shake the hand of Senator Edward Kennedy, who hours earlier had endorsed Mr Obama.

As she did so, Mr Obama turned his back.

Republican candidate Senator John McCain stayed in Florida ahead of his party's primary in the state on Tuesday.

Lame duck?

The State of the Union address is expected to be Mr Bush's last before he leaves office in January 2009, although he does have the right to deliver one more immediately before he goes.

According to Gallup polls of approval ratings around the time of the State of the Union addresses, this is the worst year for Mr Bush since his presidency began.

The BBC's James Coomarasamy in Washington says Mr Bush's speech was overall more businesslike than inspirational, perhaps more reflective of a more realistic president - aware that some of his policy goals would now remain elusive but determined that others would not.