Bush wants diplomatic solution to Iran crisis-UK

LONDON, June 8 (Reuters) - US President George W Bush wants and believes in a diplomatic solution to the international standoff with Iran over its nuclear programme, British Prime Minister Tony Blair said today.

Blair, one of Bush's closest global allies, pointed to last week's offer from Washington to talk to Tehran if it suspended uranium enrichment work as a very significant step.

''I think that is a big step. It indicates that America wants to find a diplomatic solution to this,'' Blair told reporters at a monthly press conference.

The United States and many of its western allies believe Iran wants to develop nuclear weapons, but the Islamic Republic says it needs atomic technology for power generation.

Washington has said it is seeking a diplomatic resolution to the crisis but has not ruled out military action.

''In every discussion I have ever had with the (US) president about Iran it has always been clear that although he is determined, as he should be, to prevent the acquisition of a nuclear weapons capability by Iran, he nevertheless wants and believes a diplomatic solution can be found,'' Blair said.

Last week's decision from Washington came just before six world powers presented Iran with proposals aimed at defusing the nuclear standoff.

The package includes incentives to encourage the world's fourth biggest oil exporter to give up uranium enrichment. But it also contains penalties if Iran rejects the offer.

Earlier today, Iranian President Mahmoud Ahmadinejad said that threats would not work in solving the dispute but added that Iran was ready to clear up misunderstandings with the world.

''In respect of Iran, people realise there is the possibility of managing to get a diplomatic solution to this and people want that,'' said Blair.

REUTERS KD BST1801