President Bush and German Chancellor Angela Merkel say they will continue working together to convince Iran not to develop nuclear weapons. Iran says it is not developing a weapon and is enriching uranium solely for peaceful civilian purposes.

Angela Merkel and George W. Bush answer reporters' questions during White House press conference, Friday

President Bush says he is working very closely with Chancellor Merkel and other European allies to determine what to do next to stop Iran from developing a nuclear weapon now that negotiations with Tehran have broken down.

After meeting with the chancellor at the White House, Mr. Bush said the next logical step in his mind is referring Iran to the U.N. Security Council for possible sanctions.

"Iran armed with a nuclear weapon poses a grave threat to the security of the world," said George W. Bush. "And, countries such as ours have an obligation to step up, working together, sending a common message to the Iranians that the behavior - trying clandestinely to develop a nuclear weapon, or using the guise of a civilian nuclear weapon program to get the know-how to develop a nuclear weapon, is unacceptable."

Taking questions from reporters in the White House East Room, Chancellor Merkel said it is crucial for Iranian leaders to understand how serious the international community is about preventing Iran from developing a nuclear weapon.

She said recent statements by President Mahmoud Ahmadinejad questioning the Holocaust and calling for an end to the state of Israel make a common approach to Tehran even more important.

"It is totally unacceptable what Iran has said recently, for example, as regards questioning the right of existence of Israel, the statements that were made with reference to the Holocaust, and it is essential, we feel, that the EU-3, together with the United States, take a common position here," said Angela Merkel.

Ms. Merkel said the international community is certainly not going to be intimidated by a country such as Iran.

But it is unclear whether the German and American leaders have the support of China and Russia to bring Iran before the Security Council. China and Russia both have the veto power to block any U.N. action.

Asked about a statement from the Chinese Foreign Ministry that referring Iran to the Security Council might complicate matters, President Bush said the job now is to form a common consensus behind what he says is a common objective.

"We did talk about the Chinese statement," he said. "Our job is to make it clear to all parties that it is in the world's interest that Iran not have a nuclear weapon, in other words, share the same goal. Once that goal is established, it makes it easier to come up with the strategy to achieve the goal."

The president said he will not prejudge Security Council action. Iran's Foreign Ministry says, if the country is brought before that body, European inspectors will lose their right to monitor Iran's nuclear activities.

President Bush and Chancellor Merkel discussed a wide array of issues, including Afghanistan, the Balkans, Iraq, the Middle East, NATO, bilateral trade and the fight against terrorism.

Chancellor Merkel again brought up her opposition to the U.S. detention center at Guantanamo Bay, Cuba, something she has said cannot and must not exist in the long term.

President Bush said the prison at a U.S. Navy base is a necessary part of protecting the American people in the fight against terrorism.