VIENNA, Austria (AP) – Six world powers agreed Thursday to offer Iran a new choice of rewards if it gives up suspect nuclear activities or punishment if it refuses, a gambit that could either defuse a global confrontation with the Islamic regime or hasten one.

“There are two paths ahead,” British Foreign Secretary Margaret Becket said in announcing agreement among the United States, Britain, France, Germany, Russia and China on a package deal for Iran that carries the threat of United Nations sanctions.

The package would be on the table for a proposed new round of bargaining with Tehran over what the West calls a rogue nuclear program that could produce a bomb. The U.S., in a major policy shift, agreed this week to join those talks under certain conditions. It would be the first major public negotiations between the adversaries in more than a quarter century.

Secretary of State Condoleezza Rice met with the foreign ministers from the European nations that led talks with Iran that stalled last year. Also present were representatives of Russia and China, which have been Tehran’s trading partners and might join in any future talks with Iran.

Since Russia and China hold vetoes in the U.N. Security Council, the U.S. needs their cooperation to seek sanctions or other harsh measures by that body.

“We are very satisfied by the results of today’s meetings here in Vienna,” U.S. Undersecretary of State Nicholas Burns told reporters. “We consider them a step forward in our quest to deny Iran nuclear weapons capability.”

A short statement issued by foreign ministers from the six powers and the European Union did not mention economic sanctions – the punishment or deterrent favored by the United States and that Iran has tried hard to avoid.

The powers agreed privately, however, that Iran could face tough U.N. Security Council sanctions if it fails to give up the enrichment of uranium and other disputed nuclear activities, U.S. officials said.

Diplomats feared Iran would immediately reject any invitation to bargain if the threat of sanctions was explicit, officials involved in the discussions said on condition of anonymity because the seven-party negotiations were private.

The foreign ministers’ statement threatens unspecified “further steps” in the Security Council.

The group’s statement also contained no details of the incentives to be offered to Iran in the coming days. Diplomats previously have said the package includes help developing legitimate nuclear power plants and various economic benefits.

“We are prepared to resume negotiations should Iran resume suspension of all enrichment-related and reprocessing activities,” as previously required by the U.N. nuclear watchdog agency, Becket said.

If Iran returned to the talks stalled since last year, “we would also suspend action in the Security Council,” Becket said.

The Security Council, which can levy mandatory global sanctions and back its mandates with military force, has been reviewing Iran’s case for two months. Its permanent, veto-holding members have been at odds over the possibility of sanctions, with Russia and China opposed.

“At this crucial stage, it is very important that none of the sides involved in the situation makes any sharp movements that would create a threat to the real prospect of using the chance to reach agreement,” ITAR-Tass quoted Russian Foreign Minister Sergey Lavrov as saying before talks began in Vienna.

Iran insists its nuclear work is peaceful and aimed at developing a new energy source.

Iran’s foreign minister welcomed the idea of direct talks, but rebuffed the U.S. condition that Tehran must put uranium enrichment on hold before talks can begin.

“Iran welcomes dialogue under just conditions but won’t give up our rights,” the state-run Iranian television quoted Foreign Minister Manouchehr Mottaki as saying Thursday.

At the White House, President Bush warned that the confrontation would end up at the U.N. Security Council if Iran continues to enrich uranium.

“If they continue their obstinance, if they continue to say to the world, “We really don’t care what your opinion is,’ then the world is going to act in concert,” Bush said.

Bush said he got a “positive response” in a telephone conversation Tuesday with Russian President Vladimir Putin, adding, “We expect Russia to participate in the United Nations Security Council. We’ll see whether or not they agree to do that.”

Bush also spoke about Iran on Thursday with Chinese President Hu Jintao. He revealed little about that conversation, saying, “They understood our strategy.”

The shift in U.S. tactics was meant to offer the Iranians a last chance to avoid punishing sanctions, and to let the United States assert that it was willing to exhaust every opportunity to resolve the Iranian impasse without force.

Previous talks among Iran, Britain, France and Germany foundered last year. European diplomats and others said the United States was partly at fault, arguing that it alone carries the global weight to force Iran to bargain in good faith and to make any agreement stick.

The U.S. offer for talks is conditioned on Iran suspending its enrichment of uranium and related activities and allowing inspections to prove it. Uranium enrichment can make fuel for nuclear power reactors or the fissile core of warheads.

European nations and the Security Council have demanded the same thing, but Iran has refused to comply.

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