Updated

U.S. President George W. Bush said Wednesday that his first choice is to resolve the nuclear standoff with Iran by using diplomacy, but "all options are on the table."

The president reinforced the possibility of a military strike against Iran, even as a last resort, during a news conference with German Chancellor Angela Merkel. Bush warned that a nuclear-armed Iran would be a danger to world peace, and he is rallying European allies to back sanctions.

The American president is pushing Iran to halt its uranium enrichment work in a verifiable way. Iran insists it is enriching only for peaceful purposes.

Bush said, "I told the chancellor my first choice, of course, is to solve this diplomatically." He quickly added, "all options are on the table."

Merkel said if Iran does not agree to suspend its enrichment program, additional sanctions would be needed.

"The offer has been put on the table to Iran, but ... if Iran does not meet its commitments, then further sanctions will simply have to follow," she said. "We again said we want to give room for diplomatic solutions, we want to give diplomacy a chance, but we also have to stay on that particular issue."

She said the global community is unified, that U.N. sanctions have been effective, and that it's important that all of the existing sanctions are implemented. Bush on Tuesday won new European promises to tighten pressure on Tehran, possibly with new sanctions.

The president had not mentioned the prospect of "all options" just a day earlier in Slovenia when discussing Iran, although he has before.

"Our position is that we ought to enforce the sanctions in place and we ought to work with our allies to levy additional sanctions if they choose — if the Iranians choose to continue to ignore the demands of the free world," Bush said.

Merkel said she favors having sanctions decided through the U.N. Security Council, but that does not preclude any discussion within the European Union about whether there are other punitive measures, perhaps in the banking sector.

Addressing opponents of taking certain sanctions, Merkel said, "Let us think of the people in Iran. This is what is essential. I think these people deserve a better outlook. ... And we would hope that the leadership in Iran would finally see reason."

The diplomatic pressure came as Iranian President Mahmoud Ahmadinejad on Wednesday said Bush's era "has come to an end" and he has failed in his goals to attack Iran and stop its nuclear program.

Ahmadinejad said pressures and sanctions won't succeed in forcing Iran to halt its uranium enrichment program. "If the enemy thinks they can break the Iranian nation with pressure, they are wrong," he said.

Bush also was asked about the war in Iraq, and he said the U.S.-led invasion in 2003 was the right decision.

"I don't regret it at all," Bush said, although he said he wished he hadn't used some language such as "dead or alive" when talking about Osama bin Laden or "bring them on" when talking about insurgents in Iraq.

Bush also said he is not seeking permanent U.S. military bases in Iraq.

The two leaders also discussed climate change, Afghanistan, how the demand for biofuels is exerting upward pressure on food prices and trade.

Merkel said she has not given up hopes of completing global trade negotiations being conducted under the auspices of the World Trade Organization. However, the so-called Doha Round of trade negotiations is at an impasse because of battles between wealthy countries and developing nations over such issues as farm subsidies.

"We have every chance to come to a successful outcome," she said. "We will see to it. We will pool all our efforts in order to bring this about."