US Vice President Dick Cheney has said Iran is at the top of the administration's list of world "trouble spots".
Cheney: Israelis might well decide to act first
He also expressed concern that Israel "might well decide to act first" to eliminate any nuclear threat from Tehran.
"You look around the world at potential trouble spots, Iran is right at the top of the list," Mr Cheney said in a TV interview aired on the day Mr George W. Bush was sworn in for a second four-year term as president.
Mr Cheney, one of the chief architects of the Iraq war, said the administration would continue to try to use diplomacy to address what he said were serious concerns about Iran's nuclear weapons programme and ties to terrorism.
The administration has also accused Iran of interfering in the affairs of neighbouring Iraq, where US forces have been bogged down in an insurgency since the 2003 invasion.
If Iran resists demands to rein in its nuclear programme, Mr Cheney said the next step would be to take the matter to the UN Security Council and seek international sanctions "to force them to live up to the commitments and obligations".
He described Iran's nuclear program as "fairly robust"- but Iran denies its nuclear facilities are to be used to make weapons.
Mr Cheney said one concern was that Israel might act against the Iranians. "If . . . the Israelis became convinced the Iranians had significant nuclear capability, given the fact that Iran has a stated policy that their objective is the destruction of Israel, the Israelis might well decide to act first, and let the rest of the world worry about cleaning up the diplomatic mess afterwards."
Israel set a precedent for such action in 1981 when it sent warplanes to destroy Iraq's French-built Osiraq reactor, seen as the key to President Saddam Hussein's nuclear ambitions.
"We don't want a war in the Middle East, if we can avoid it. And certainly in the case of the Iranian situation, I think everybody would be best suited by or best treated and dealt with if we could deal with it diplomatically," Mr Cheney said.
After being sworn in yesterday, Mr Bush admonished what he called "the rulers of outlaw regimes" and said: "We will defend ourselves and our friends by force of arms when necessary."
The New Yorkermagazine reported this week that the United States has been conducting secret reconnaissance missions inside Iran to help identify potential nuclear, chemical and missile targets.
The White House and Pentagon have disputed the report.