U.S. Secretary of State Condoleezza Rice says Iran is a very dangerous state with dangerous policies.
In a television interview on CNBC's Closing Bell Friday, Rice said while Washington is committed to a diplomatic solution, Iran must know "there are coercive elements" to U.S. policy as well.
She said that with Iran becoming "increasingly dangerous," the United States and its allies are discussing new sanctions to further curb Tehran's access to the international financial system.
She said that despite two U.N. Chapter 7 resolutions - the U.N.'s most serious Security Council resolution - Iran continues to pursue technologies that could lead to a nuclear weapon.
When asked if the United States should consider military retaliation, Rice said President Bush "is never going to take his options off the table."
Tehran denies it is trying to build a nuclear weapon.
Some information for this report was provided by Reuters.