US President George W Bush and German Chancellor Angela Merkel have agreed to pursue a diplomatic end to the nuclear standoff with Iran as they worked on a common strategy towards Tehran.
However the two did not appear to narrow their differences on individual country sanctions. Ms Merkel stuck to her position that Germany would wait until ongoing European and UN diplomatic efforts have run their course.
Mr Bush said that Iran was on the top of his agenda and that he would continue to seek a diplomatic solution.
Ms Merkel said she was convinced that the diplomatic possibilities have not yet been exhausted.
She said that Iran's refusal to freeze sensitive nuclear work might require a third round of UN sanctions.
Ms Merkel noted ongoing diplomacy by the EU foreign policy chief and a push by the International Atomic Energy Agency (IAEA) to curb Iran's atomic activities.
She said that if all of those efforts fail 'then we need to think about further possible sanctions.'
