Bush, Merkel say diplomatic solution needed on Iran

CRAWFORD, Texas, Nov 10 (Reuters) US President George W Bush and German Chancellor Angela Merkel today said they would seek a diplomatic solution in dealing with Iran's nuclear program.

''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.

Bush last month suggested that a nuclear-armed Iran could lead to World War Three, which alarmed some European allies.

Merkel said if there was no sign of progress in discussions with Iran, then ''we need to think about further possible sanctions.'' If the UN Security Council were to announce sanctions, that would be the ''clearest message'' that could be conveyed to Iran, she said through a translator.

''At the center of all of our efforts has to be sanctions that would then be called by the United Nations Security Council,'' she said.

Iran has refused to halt uranium enrichment after two previous UN sanctions resolutions and denies it wants to make atomic bombs, saying its program is for power generation.

Reuters SBA VP0043