America is to renew the push for punishing sanctions against Iran when world leaders meet next week to discuss the Islamic republic's uranium enrichment programme.

In a tacit declaration that three years of diplomacy led by the E3 group of Britain, Germany and France has failed, Condoleezza Rice, the US Secretary of State, said that Tehran must now face the consequences of its continued refusal to suspend nuclear research.

The US has dismissed as "wild speculation" media reports that it is planning a military strike against Iran's nuclear facilities but in a speech in Washington late last night Ms Rice suggested invoking the powers of Chapter VII of the UN Charter. This allows for the gradual ratcheting up of internationial pressure against rogue states to the point of military action.

"There is no doubt that Iran continues to defy the will of the international community," Ms Rice said. "When the Security Council reconvenes, there will have to be some consequence for that action."

She added: "I’m certain that we’ll look at measures that could be taken to ensure that Iran knows that they really have no choice but to comply."

Article 41 of the chapter allows for sanctions, including economic and transport measures or the severance of diplomatic relations, and Article 42 states that if those measures fail the UN Security Council "may take such action by air, sea, or land forces as may be necessary to maintain or restore international peace and security".

Tehran insists that its programme is solely for generating electricity, vehemently denying Western charges that its real intention is to build an atomic bomb.

Ms Rice said: "There is no doubt that Iran has continued salami-slicing tactics — a little bit here, and then a little bit more, and then a little bit more — despite the fact that the international community has said very clearly: 'Stop.'"

The threat followed another apparently fruitless visit by Mohamed ElBaradei, Director-General of the International Atomic Energy Agency (IAEA), to Iran yesterday.

His requests that the Islamic republic agrees to freeze its research were mocked. Cui Tianakai, China’s Assistant Foreign Minister, has taken up the diplomatic baton and will visit Tehran over the next few days to attempt to find a compromise to prevent the further escalating of the crisis. Both China and Russia, who have close trading and energy links with Iran, wield vetos on the Security Council.

President Mahmoud Ahmadinejad responded with more populist rhetoric, describing Iran as a mountain in the midst of weaklings in a speech broadcast on state television. Mr Ahmadinejad has argued that Iran is now in a stronger bargaining position after mastering the art of uranium enrichment and is now proceeding on an industrial scale.

"Today, thank God, the Iranian nation is a powerful one and we are going to have a dialogue with the world from a position of power," he said in a speech in the northeast of the country.

"Everything we have is from God, and a few weaklings cannot stand against the Iranian people."

The President poured further fuel on the conflict this evening when, at a conference in Tehran, he described Israel as a "rotten dried tree....that will be annihilated by one storm".

Representatives of the five permanent members of the Security Council plus Germany are to meet in Moscow next Tuesday to discuss the next moves in advance of a new deadline of April 28. Mr ElBaradei is to report back to the UN Security Council by the end of the month on whether Iran is complying with its demand to stop all enrichment activity.

Iranian newspapers have hailed the apparent breakthrough on uranium enrichment, but differ over the wisdom of confronting the international community.

Hardline dailies scoffed at the apparent impotence of the West, saying that it had been "checkmated" by Iran. "What can they do with Iran now?" demanded the conservative Jam-e-Jam. The ability to enrich uranium had put Iran on an "irreversible path", it said.

But reformist publications argued that Tehran could afford to make concessions. "The possibility of a compromise between Iran and other parties has been increased," argued Sharq.

Ayatollah Ahmad Jannati, a senior cleric in Iran's regime, said in a Friday prayer sermon that the United States was a "decaying power" and pointed out that Iran was not like Iraq or Afghanistan. "Don’t be intimidated by their threats. They don’t have the stamina to do anything," he said.

Times Recommends

• 'Lesbian' clinch to embarrass Berlusconi
• British embassy analyst faces prison sentence
• The woman who fell in love with an assassin