Raising the pitch of its rhetoric against Iran, the Bush administration has said while the military option against Tehran stayed open, the United States could also pursue economic sanctions beyond what the UN Security Council may determine.
"We're exercising a lot of diplomatic activity here to try and resolve this peacefully.
That's our objective but no President charged with defending the American people takes the military option off the table," the American Ambassador to the United Nations John Bolton said in an interview with CNN.
Accusing Tehran of breaking its obligations under the Nuclear Non-proliferation Treaty and providing weapons and financial support to Hezbollah and Hamas, Bolton said: "...The consequences of an Iran with nuclear weapons are not only the capability they're seeking to deliver them through ballistic missiles, but also the possibility they could transfer a nuclear weapon to a terrorist group."
The Security Council had set Thursday's deadline for Iran to stop its nuclear activities threatening sanctions if it failed to comply.
The UN nuclear watchdog IAEA, in a report on Thursday had confirmed that Tehran had not stopped uranium enrichment despite the warning.
Bolton said both China and Russia at the time of passing the UN resolution had assured they would discuss sanctions if Iran did not meet the deadline.
But the top American envoy to the UN stressed that Washington may go on its own, even over and beyond what Europe and Japan could come up with.
"There is no doubt that there is a wide range of sanctions we could seek to impose on Iran that do not require Security Council authorisation.
I think the utility of the Council acting under Chapter 7 is to make the sanctions mandatory for UN members.
"But if for whatever reason we don't achieve the level of sanctions we want, and even if we do, there are other things we're going to pursue that countries like the European Union, Japan and others can impose by their own national decisions," Bolton said.
He was reminded that the United States has just about slapped every sanction available against Iran and hence may have to be dependent on others as in Europe.
"We've imposed just about all the sanctions we can with a couple of small exceptions. Small in the big picture.
For instance, in the area of financial transactions, investment transactions and large flows of capital, there are a number of things that governments could do already under existing authorities concerning anti-terrorism legislation and Iran is the central banker of terrorism..." Bolton said.
"There are a lot of steps that countries could take and I think major financial institutions, major businesses, ought to think long and hard about doing business with a country like Iran".