US Vice President Joe Biden smiles prior to speech at International Conference on Security Policy in Munich, 07 Feb 2009

In what appears to be a big shift in foreign policy, U.S. Vice President Joe Biden publicly reached out to Iran during a major, wide-ranging address to international leaders and security experts in Munich, Germany, raising the possibility of a new era in U.S.-Iranian relations.

U.S. Vice President Joe Biden wasted no time, telling world leaders he represents a new administration in Washington and a "new day" setting the tone for a diplomacy first approach by reaching out to Iran.

"Our administration is reviewing our policy towards Iran, but this much is clear: We will be willing to talk," he said.

But the vice president says Iran must also be willing to change.

"Continue down the current course, then there will be continued pressure and isolation. Abandon the illicit nuclear program, and your support for terrorism, and there will be meaningful incentives," he said.

Tensions between the United States and Iran center on Iran's pursuit of nuclear technology.  Iran claims its program is for peaceful purposes, something the United States and its Western allies dispute.  They charge Iran is secretly pursuing nuclear weapons, and the United Nations Security Council has sanctioned Iran three times.

And Biden says the U.S. will be ready if Iran refuses to sit down and talk.

"We will continue to develop missile defense to encounter the growing Iranian capability, provided the technology is proven and it is cost effective. We'll do so in consultation, with you our NATO allies, and with Russia," he said.

The U.S. relationship with Russia is another sensitive issue for the new administration.  Biden admits there has been a "dangerous drift in relations" between the two powers.  Like Biden, French President Nicholas Sarkozy says improving ties between Russia and the West is key.

He says confidence must be restored and says he doesn't think the Russia of today is a military threat to NATO or the European Union.

U.S. Vice President Joe Biden  with German Chancellor Angela Merkel after their bilateral meeting in Munich, 07 Feb 2009

Other leaders are waiting to hear more on the new U.S. approach. German Chancellor Angela Merkel is among them.

She says Germany is willing to go along with the U.S. and pursue talks with Iran.  But she warns Germany is ready to embrace stricter sanctions if talks do not work.  

European countries broadly welcomed Mr. Obama's election and Biden's presence at the conference normally attended by the U.S. defense secretary sent an important signal to Europe that the Obama administration was keen to rebuild relations.