President Bush said Saturday that Iran has isolated its people and put the world in danger by rejecting a deal aimed at halting Tehran's uranium enrichment program.

In Tehran, European Union diplomat Javier Solana presented Iran a modified package of economic, technological and political incentives on behalf of the United States, Germany, Britain, France, Russia and China. Iran immediately rejected the deal because it requires suspending uranium enrichment, a program the West fears could be part of a nuclear weapons program.

"I'm disappointed that the leaders rejected this generous offer out of hand," Bush said. "It's an indication to the Iranian people that their leadership is willing to isolate them further. Our view is we want the Iranian people to flourish and to benefit."

French President Nicolas Sarkozy took the same approach as Bush at a joint news conference. He said the Iranian people "deserve better than the impasse into which some of their leaders are leading them."

Iran says it is enriching uranium to generate electricity, not to build nuclear weaponry — a claim the West doubts is true.

The repackaged incentives were agreed on last month in what diplomats called mainly cosmetic changes to the original 2006 offer, while maintaining the threat of further U.N. sanctions. So far, three sets of sanctions by the United Nations have failed to bring about any change.

Bush also issued a warning to Syrian President Bashar Assad, saying the Syrians should stop working with Iran to destabilize the Mideast. "My message would be `Stop fooling around with the Iranians and stop harboring terrorists,"' Bush said.

Both leaders were asked what message they want to send to the Syrians to get them to normalize relations with the West and achieve stability in Lebanon. Bush quickly responded, saying Syria should serve as a constructive force in the Middle East to help the advance of a Palestinian state and make it clear to the Islamic militant group Hamas that "their terror should stop for the sake of peace."

On Iraq, Bush brushed off criticism that a long-term security deal between the United States and Iraq was faltering.

"If I were a betting man, we'll reach an agreement with the Iraqis," Bush said. "Of course, we're there at their invitation. It's a sovereign nation ... We're going to work hard to accommodate their desires. It's their country."

The deal would provide a legal basis for the presence of U.S. forces in Iraq after a U.N. mandate expires. Bush said the agreement would not commit future U.S. presidents to any troop levels in Iraq and would not establish permanent U.S. bases.

Bush's upbeat assesssment came as Prime Minister Nouri al-Maliki declared Friday that talks with the U.S. on the deal were deadlocked, as Sunni and Shiite preachers spoke out against a plan that would enable American troops to remain in Iraq after year's end.

Al-Maliki said negotiations will continue, but his tough talk reflects Iraqi determination to win greater control of U.S. military operations after the U.N. mandate expires at the end of the year. Failure to strike a deal would be a major setback for Bush ahead of the November presidential election.

Bush once again predicted that a peace agreement between the Israelis and Palestinians was possible by year-end, despite setbacks and violence.

"Our job is ... to keep the process moving, so I'm optimistic," Bush said. "I understand how difficult it is."

Iran's nuclear ambitions have dominated Bush's travels through Slovenia, Germany, Italy and now France.

During his trip through Europe, Bush has maintained that he wants to settle the standoff with Iran through diplomacy. But he has also reiterated that a military strike is possible.

Iran's rejection of the new package was expected.

Bush's national security adviser, Stephen Hadley, said earlier this week that such a rejection would trigger the international community to "get much more aggressive" about enforcing the U.N. penalties and taking other steps to squeeze Iran's vast international business and banking relationships.