"It might be time to consider a different approach toward the new, more radical, more intolerant Iranian regime," Nicholas Burns, number three in the State Department, said in a speech here.

"Through its diplomatic contacts and its trade and investment, the world does have leverage -- and that leverage should be used constructively now -- to convince the hard-liners in Tehran that there is a price for their misguided policies," Burns said.

The United States has long sought UN action to head off Iran's suspected bid to develop a nuclear bomb. Lacking sufficient support, Washington has backed a European attempt to rein Tehran in with economic and security incentives.

But as the talks floundered, Burns said there was "a widening circle of countries ... that are willing to use their diplomatic and economic leverage to convince the Iranians" to scrap their nuclear aspirations.

Speaking to reporters after his speech, Burns said Russia, the European Union, China, Japan, India and Australia were all concerned by Iran's activities, and pressure on Tehran next year would be a "positive development."

Asked if he was proposing the EU impose sanctions if diplomatic talks with Iran fail, the undersecretary of state for political affairs said, "That is up to the EU to decide. It is not up to the US."

But he added, "All of us around the world have to think about how we can influence that government. And it is certainly one way that many countries around the world can do that."