CRAWFORD, Texas, Nov 10 (Reuters) German Chancellor Angela Merkel told US President George W Bush today she would be willing to support a third round of UN sanctions against Iran if Tehran continues to resist demands to halt sensitive nuclear work.
Merkel, in a visit to Bush's ranch in Crawford, Texas, also said she would be willing to look at possible reductions on her country's commercial ties with Iran should other efforts fail to secure cooperation from Tehran over its nuclear programme.
Bush agreed with Merkel that the focus was on diplomacy regarding Iran.
''We were at one in saying that the threat posed through the nuclear program of Iran is indeed a serious one,'' Merkel said at a joint news conference with Bush.
''We both share this view, but we also were of the opinion that we think that this issue can be solved through diplomatic means; that the next step, then, obviously, would be a resolution,'' she said through a translator.
But Merkel said she wanted to wait for the outcome of European Union talks with Iran and a report from the UN atomic watchdog before making a final decision on sanctions.
''If the reports remain unsatisfactory ... we need to think about further possible sanctions ... we also have to then talk and agree on further possible sanctions,'' she said.
The West accuses Iran of seeking to develop a nuclear weapon but Tehran says its nuclear programme is purely for civilian purposes of generating electricity.
Bush last month said a nuclear-armed Iran could lead to World War Three, which alarmed some European allies.
''What the Iranian regime must understand is that we will continue to work together to solve this problem diplomatically, which means they will continue to be isolated,'' Bush said at the news conference.
Bush and Merkel's two days of talks at the ranch also covered issues such as Afghanistan, global warming and a planned conference on West Asia peace that Bush is due to host in a few weeks in Annapolis, Maryland.
But the visit was also aimed at solidifying ties between the two leaders in the aftermath of a rift between their countries that opened over the Iraq war. Bush had a chilly relationship with Merkel's predecessor, Gerhard Schroeder.
Bush and Merkel enjoy a solid rapport which was underscored by his decision to host a visit with her at his ranch, an invitation he usually reserves for his favorite world leaders.
The visit follows meetings he held earlier this week with French President Nicolas Sarkozy in Washington and at the estate in Mount Vernon, Virginia, of the first US president, George Washington.
Bush and Sarkozy also pledged a common approach on Iran.
Bush showed Merkel around his 1,600-acre ranch during a morning stroll. Joined by their spouses, the two leaders on Friday evening dined on pecan-smoked beef tenderloin and green chili-cheese grits souffle.
Today, they were to continue their talks over hamburgers.
Reuters SBA VP0225