US offers to join Iran talks, crude oil futures fell about $US1.50 a barrel

As Reuters reports, Secretary of State Condoleezza Rice said the talks offer was part of a package of incentives and sanctions whose "essential elements" have been agreed with Britain, France and Germany.

Ms Rice said the United States was determined to "give diplomacy its very best chance to succeed" in resolving the nuclear crisis with Iran, which has raised fears that Washington might eventually take military action.

The resumption of diplomatic ties with Iran was not under consideration and Iran would incur "great costs" if it continued to pursue nuclear weapons, she said.

Iranian officials had no immediate comment on the US offer.

"The president is not going to take any of his options off the table, temporarily or otherwise," Ms Rice told a news conference when asked about a possible military option.

Ms Rice said she hoped the offer would "add weight" to European negotiations to get Tehran to suspend what Washington and its allies consider Iran's nuclear weapons program.

Tehran says it is willing to negotiate on the number of uranium-enriching centrifuges it uses for research, but has stressed it would not stop running the devices entirely as the UN Security Council has called for.

Crude oil futures fell about $US1.50 a barrel in New York trading following the Rice comments on Iran, the world's fourth-largest oil producer.

Escalating tensions over Iran's nuclear program and concerns that Iran may choose to retaliate by limiting crude supplies to the global market have been one of the key drivers of lofty oil prices.

The United States has often said it was open to talks with Iran, but the Bush administration has repeatedly dismissed growing calls from members of the US Congress, former officials and prominent analysts for dialogue.

The United States and the EU 3 have been working with Russia and China on a "carrot and stick" package, designed to persuade Iran to abandon activities that Tehran insists are only intended for peaceful energy purposes.

US officials, briefing reporters on condition of anonymity, said Russia and China generally support the package but there were still some details to negotiate.

Major power foreign ministers are due to meet in Vienna on Thursday to complete this work.

The United States, aiming to win Russian support, has accepted language in a proposed UN Security Council resolution that would rule out the immediate threat of military action against Tehran, US and European officials said.

The compromise involves not invoking the whole Chapter 7 of the UN Charter as Washington had been demanding, but citing specific articles that leave out the one referring to use of force, the officials said.

Iran has rejected in advance the planned overture from Britain, France, China, the United States, Russia and Germany as akin to offering "candies for gold".

The United States has not had formal diplomatic relations with Iran since after the 1979 Islamic revolution when fundamentalist students held 52 Americans hostage for 444 days.

Since then, there have been intermittent attempts at communications, most of them of short-lived or inconsequential. In 1999, the United States and Iran were involved in so-called six plus two talks on Afghanistan.

The administration gave short shrift to an unprecedented letter this month from Iranian President Mahmoud Ahmadinejad, the first direct communication between an Iranian and US president in decades.

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