By Matt Spetalnick and Kerstin Gehmlich
MESEBERG, Germany (Reuters) - President George W. Bushthreatened Iran on Wednesday with more sanctions if it fails tostop enriching uranium and said all options were on the tableto thwart Tehran's nuclear ambitions.
Bush, who met German Chancellor Angela Merkel north ofBerlin during a week-long tour of Europe, is pressing allies toagree new punitive measures against Iran.
While Europeans have voiced support for such a move, theyare also looking past Bush, whose presidency ends in January.
"Both the chancellor and my first choice of course is tosolve this diplomatically," Bush told a joint news conferencewith Merkel.
But he added: "All options are on the table", a referenceto the threat of military action to stop Iran's nuclearprogramme, which the West fears is aimed at making atomicbombs. "The message to the Iranian government is very clear,"Bush said.
Merkel said she could not exclude a further round ofsanctions if Iran fails to cooperate and suspend enrichmentwork, which Tehran argues is for peaceful power generation.
Despite three rounds of sanctions by the U.N. SecurityCouncil, Iran has refused to stop enrichment. Within a week, EUforeign policy chief Javier Solana plans to present a revisedpackage of political and economic incentives for Iran to giveup enrichment, similar to an offer made in 2006 that wasrejected.
Bush, visiting Europe for the last time before his eightyears in office comes to an end, met Merkel at a governmentresidence north of the German capital. He will later head toRome, Paris, London, and Belfast in Northern Ireland.
The U.S. president went biking through the rolling hillsand lush woods of the compound on Wednesday morning.
At a relaxed news conference, Bush thanked the chancellorfor inviting him to a "modest cottage by the lake" and said hehad enjoyed a "fabulous" meal of asparagus, a seasonaldelicacy.
IRAQ LEGACY
Bush remains unpopular in western Europe more than fiveyears after he clashed with Germany, France, Russia and othersover the U.S.-led invasion of Iraq.
He told reporters in Meseberg he had no regrets about goingto war to oust Saddam Hussein but admitted he could have beensmarter in making the case for the U.S.-led invasion.
"I could have used better rhetoric to indicate that one, wetried to exhaust diplomacy in Iraq, and two, that I don't likewar," Bush said. "But, no, the decision to remove SaddamHussein was the right decision."
Bush said he expected to seal a security pact with theBaghdad government but called media reports that Washington isplanning permanent bases in Iraq "erroneous".
The United Nations mandate authorising the presence ofU.S.-led forces in Iraq expires at the end of 2008.
The U.S. is trying to negotiate a deal that would provide alegal basis for troops to stay and a separate "strategicframework agreement" that would outline the two states'political, diplomatic and economic relationship.
U.S. Democrats worry Bush could use the agreements to tiethe next president into current Iraq war policies.
Merkel, a conservative who grew up in East Germany, hasworked hard to repair ties between the Cold War allies and hasforged a close relationship with Bush, but acknowledged onTuesday that a "new era" was looming when Bush is replaced.
Democratic candidate Barack Obama is especially popular inGermany, where he is likened to President John F. Kennedy, whowon over the country in 1963 with his celebrated "Ich bin einBerliner" speech.
Obama says he is ready to talk directly to Iran over itsnuclear programme, a move the Bush administration has rejected.
(Additional reporting by Jeremy Pelofsky, MadelineChambers, Erik Kirschbaum and Paul Carrel; Writing by NoahBarkin; Editing by Catherine Evans)
