U.S. President-elect Barack Obama said on Sunday that he was prepared to offer Iran economic incentives to stop its nuclear program, but he also warned that sanctions could be toughened if it refused.
"We are willing to talk to them directly and give them a clear choice and ultimately let them make a determination in terms of whether they want to do this the hard way or the easy way," Obama told NBC's "Meet the Press" program.
"We need to ratchet up tough but direct diplomacy with Iran, making very clear to them that their development of nuclear weapons would be unacceptable, that their funding of terrorist organizations like Hamas and Hizbullah, their threats against Israel are contrary to everything we believe in," Obama said.
He said his administration would work with international partners to present a set of "carrots and sticks" to encourage Iran to halt its nuclear development program.
"In terms of carrots, we can provide economic incentives that would be helpful to a country that despite being a net oil producer is under enormous strain, huge inflation, a lot of employment problems," Obama said, without going into specifics. "But we also have to focus on the sticks. In order for us to change Iran's behavior, we may have to tighten up those sanctions."
Iran last month signaled it was expanding its nuclear enrichment program, despite the pressure being applied to it by Western countries. Tehran says the program is purely for peaceful purposes to generate more electricity.
During a presidential debate with Republican rival John McCain in October, Obama said his administration would work to restrict gasoline imports to Iran, which suffers a shortage of refined fuel.
There have been three rounds of United Nations sanctions against Iran since 2006, as well as separate US measures, for its refusal to stop enriching uranium for nuclear power plants -- or nuclear bombs -- or to make its nuclear power program transparent.