Germany's foreign minister said in comments broadcast Thursday that European efforts to refer Iran to the U.N. Security Council did not mean abandoning attempts to reach a diplomatic solution.
Iran's top nuclear negotiator, meanwhile, told the British Broadcasting Corp. that his country is ready to compromise with the West over its nuclear program.
"If they want guarantees of no diversion of nuclear fuel, we can reach a formula acceptable to both sides in talks," the negotiator, Ali Larijani, told the BBC.
The offer to guarantee nuclear fuel won't be diverted to a weapons program was unlikely to satisfy Europe and the United States, which are insisting Iran agree not to enrich uranium at all.
Guarantees about diversion of enriched fuel would be unenforceable if the U.N. nuclear watchdog, the International Atomic Energy Agency, or other monitors were expelled from Iran, as happened in North Korea.
German Foreign Minister Frank-Walter Steinmeier told ZDF television from Egypt that "the search for further solutions, such as involving the governing board of the IAEA, does not mean that we are no longer seeking diplomatic solutions."
"We are now looking for them from a different angle and, if possible, supported by the authority of the Security Council," Steinmeier said.
He said the European negotiators' talks with Iran had "reached a point where we would have risked our credibility if we had simply continued," Steinmeier said.
Europe, backed by the United States, on Wednesday rejected Iran's request for talks, raising international pressure on Tehran to suspend uranium enrichment.
Secretary of State Condoleezza Rice said "there's not much to talk about" until Iran halts nuclear activity. But Iranian President Mahmoud Ahmadinejad accused the West of acting like the "lord of the world" in denying his country the peaceful use of the atom.
The quick dismissal of Iran's request for a ministerial-level meeting with French, British and German negotiators focused attention on the next step: the U.S. and European push to refer Iran to the U.N. Security Council, which could impose economic and political sanctions.
Russia and China, which have veto power on the council, appeared to remain the greatest obstacles. Both nations are opposed to sanctioning a country with which they have strong economic and strategic ties. In recent days, they have expressed reluctance even to the idea of referral.
Even if there were consensus on sanctions, the five permanent Security Council members would be faced with a dilemma. Placing an embargo on Iran's oil exports would hurt Tehran, which earns most of its revenues from energy sales, but also roil world crude markets, spiking prices upward.
Europe halted talks after Iran resumed uranium enrichment research this month. The West fears the nuclear program will lead to nuclear weapons, though Iran insists it is only for civilian use.
In Washington, Rice and the European Union's foreign policy chief, Javier Solana, also rejected any return to talks. France, Germany and Britain led the talks with Iran on behalf of the 25-member European bloc.
Rice condemned Iran's decision to resume its nuclear program, saying the international community is united in mistrusting Tehran and its present leadership with such technology.
Britain, too, refused to consider renewed talks.
The IAEA said it would hold a special meeting of its 35-nation Board of Governors next month.
The United States, Britain, France and Germany have drawn up a draft IAEA resolution that would ask the Security Council to press Tehran "to extend full and prompt cooperation to the agency" in its investigation of suspect nuclear activities -- though it stops short of asking the council to impose sanctions.