Secretary of State Condoleezza Rice told senators Wednesday the United States will actively confront what she said are the aggressive policies of the Iranian government. At the same time, she called for sharply increased U.S. spending to try to promote political freedom in that country.

Condoleezza Rice discusses US foreign policy priorities before Senate Foreign Relations Committee, Feb. 15, 2006

Secretary Rice says the Bush administration will ask Congress for $75 million in supplemental money this year to increase U.S. broadcasting to Iran and other pro-democracy programs, to counter what are described here as the radical policies of the government of President Mahmoud Ahmadinejad.

In an appearance before the Senate Foreign Relations Committee, the secretary said Iranian activities including its nuclear program, support for regional terrorists, influence in Iraq and close ties to Syria pose what is probably the United States' biggest strategic challenge.

She said the trend is alarming not only to the United States and Europe, but also to key allies in the Middle East and will be a key issue in a trip she makes next week to the region, with stops in Egypt and Saudi Arabia.

"No one wants to see a Middle East that is dominated by an Iranian hegemon, particularly one that has acquired nuclear weapons technology," she said. "And in fact, the face of Iran now, President Ahmadinejad, has crystallized the concern of the international community about Iran, because he speaks in blunter ways about Iranian ambitions than did prior Iranian governments."

On the nuclear issue, Secretary Rice said the latest Iranian steps to restart uranium enrichment and reprocessing activity have crossed a point to where Tehran is now in open defiance of the international community.

She said the decisions of Russia, China and India earlier this month to support referral of the matter of the U.N. Security Council amount to a major diplomatic breakthrough.

She said Undersecretary of State Nicolas Burns will try to further build a consensus for Security Council action at a Moscow meeting next week of political directors of the G-8 industrial powers.

Under questioning from senators, Rice would not be specific about potential punitive measures against Iran in the council, but said they would have to balance punishment of the Tehran government with concern for global economic stability and the interests of everyday Iranians.

"The international community is going to have to act and act decisively if Iran is to know that there's a consequence for their open defiance of the international community," she said. "And so we are working on precisely that. We want to do things that are at least in the first instance, we want to look at the effect on the international community as a whole of any actions that we take, economies and the like. But we also want to try and not hurt the Iranian people. And so I think you will se us trying to walk a fine line in what actions we take."

The administration's $75 million request for promoting Iranian democracy and human rights would be a huge increase over the $10 million already approved for the current fiscal year.

A senior administration official who briefed reporters here said the funds would go mainly to increase satellite television broadcasting to Iran by the U.S. government and private Iranian-American groups, and broadcasts of the U.S.-funded Radio Farda.

There would also be money for grants to non-governmental organizations for democracy-promotion activities in Iran, and increased opportunities for Iranian students to study in the United States.

The secretary lamented in her Senate testimony that the number of Iranians enrolled in U.S. schools had plummeted from 200,000 in the 1970s to only about 2,000 today.