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Yahoo! My Yahoo! Mail More Yahoo! Services Account Options New User? Sign Up Sign In Help Yahoo! Search web search Home Singapore Asia Pacific World Business Entertainment Sports Technology Weekend Edition Africa Europe Latin America Middle East North America U.S. says sanctions against Iran "having impact" Reuters - Tuesday, November 9 Send IM Story Print By Phil Stewart and Arshad Mohammed MELBOURNE - The United States rejected on Monday Israeli concerns that it had become necessary to pursue a credible military threat against Iran, saying sanctions could deter Tehran from building a nuclear weapon. Israeli Prime Minister Benjamin Netanyahu told U.S. Vice President Joe Biden on Sunday that such a threat was the only way to sway Iran, Israeli political sources said. "I disagree that only a credible military threat can get Iran to take the action that it needs to end its nuclear weapons programme," U.S. Defence Secretary Robert Gates a news conference in Melbourne when asked about Netanyahu's remarks. "We are prepared to do what is necessary. But at this point we continue to believe that the political, economic approach that we are taking is in fact having an impact in Iran." Israel and the United States do not rule out a pre-emptive strike to stop Iran, but U.S. officials have repeatedly warned of far-reaching consequences of any military action. They also say while a military strike might delay Iran, it will not stop it from pursuing a nuclear bomb if it wants one. Iran denies Western accusations that its nuclear programme is aimed at developing atomic weapons. But the standoff has the potential to ignite a regional arms race and degenerate into a wider Middle East conflict. Gates, echoing comments by Biden on Sunday, said that tough new sanctions approved by the U.N. Security Council were "biting more deeply than anticipated." He later told a small group of reporters that additional punitive measures by allies, beyond the U.N. sanctions, "have had considerable effect in terms of aggravating Iran's trade and financial operations." Still, he said all options remained on the table. "The president has said repeatedly that when it comes to Iran that all options are on the table and we are doing what we need to do to ensure that he has those options," he said. TALKS IN TURKEY? Iranian Foreign Minister Manouchehr Mottaki has said Iran is ready to hold talks on its nuclear programme with major powers, and proposed that talks be held in Turkey. "The Iranians have reached back out and said they would be willing to meet, but so far as I know there is no date or time for that meeting," U.S. Secretary of State Hillary Clinton told the same news conference, following talks in Australia. "Certainly we have made it clear we would welcome a return to the negotiating table." Israel's talk of a military threat has raised speculation in Israeli media that Netanyahu, who has rebuffed U.S. and international calls to reimpose a freeze on building in West Bank settlements, was trying to shift the focus of his visit away from the settlement stalemate. But Netanyahu had made clear that Israel wanted to see if tough economic sanctions could eliminate what it has described as a threat against its existence. Netanyahu is scheduled to meet Clinton in New York on Thursday for a fuller discussion on Israeli-Palestinian issues. Netanyahu will not see Obama, who is on a 10-day trip to Asia. "Agreement or not, our commitment to your security is unconditional and complete," one of the Israeli sources quoted Biden as telling Netanyahu. Biden said later the United States and Israel had a "critical strategic relationship" and it was "one in which we will not yield one single inch." A 10-month moratorium on housing starts in West Bank settlements expired in late September, some three weeks after direct peace talks began in Washington. Clinton said on Thursday she was working nonstop to break the deadlock. Diplomats said Washington had offered Israel a package of incentives, including ideas on security, to persuade Netanyahu to resume a partial settlement freeze for two months. The proposals included U.S. backing for Netanyahu's demand for an Israeli military presence along the Jordan river, the likely eastern border of a future Palestinian state. But Israeli leaders have balked at what the political sources said was the package's vague time frame for the troop deployment, which Palestinians oppose. A top Palestinian official said last week the Palestinians would give the United States several more weeks to try to relaunch direct peace talks with Israel. Netanyahu flies to New York on Monday after speaking to the Jewish Federations conference and will raise in a meeting with U.N. Secretary General Ban Ki-moon Israel's objection to any unilateral statehood moves at the United Nations by the Palestinians, an Israeli official said. 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