Iran: The United States and European Union expressed cautious optimism that Iran is serious about returning to talks with world powers over its nuclear programme.

Secretary of State Hillary Rodham Clinton and European Union foreign policy chief Catherine Ashton said they were continuing to study Iran’s response to a proposal to restart the stalled negotiations.

They said, however, that they welcomed Iran’s professed willingness to hold talks as soon as possible without preconditions.

Speaking to reporters after meeting with Ashton at the State Department, Clinton said the Iranian reply was “one we have been waiting for.

“But, Clinton stressed that “if we do proceed, it will have to be a sustained effort that will produce results.” “We must be assured that if we make a decision to go forward, we see a sustained effort by Iran to come to the table to work until we have reached an outcome that has Iran coming back into compliance with their international obligations,” Clinton said.

“We’re evaluating all of these factors. But I think it’s fair to say … that we think this is an important step and we welcome the letter.”

Ashton said she was “cautious” but “optimistic” that talks could resume. “I think it is good to see that the letter has arrived and there is a potential possibility that Iran may be willing to resume talks,” Ashton said.

Clinton and Ashton were referring to a letter from chief Iranian nuclear negotiator Saeed Jalili, which was sent to Ashton on Tuesday, in which he proposed new discussions.

Ashton is the point of contact for the five permanent members of the UN Security Council and Germany, who are demanding that Iran freeze all uranium enrichment.

“We voice our readiness for dialogue on a spectrum of various issues which can provide ground for constructive and forward looking cooperation,” Jalili wrote in the letter.

Ashton had written Jalili in October, offering Iran a new round of talks toward an agreement that “restores international confidence in the exclusively peaceful nature of Iran’s nuclear programme.”

The West fears Iran seeks nuclear weapons, and speculation is rife that Israel may launch a pre-emptive strike to set back the programme.

All options on table if Iran goes nuclear: Panetta

US Defence Secretary Leon Panetta has warned Iran that “all options” are on the table if Tehran blocks the Straits of Hormuz or if it goes nuclear.

“We’ve made very clear that Iran will not develop a nuclear weapon. We will not tolerate an Iran that has a nuclear weapon. A fifth of the oil of the world goes through those straits. They’re international waters. We’re not going to allow them to block that,” Panetta warned, terming these as red lines.

“If they cross one of those lines, then we have all options on the table – we, the United States, have all options on the table.”

The United States, he said, doesn’t want an Iran that basically spreads violence around the world, which supports terrorism that conducts acts of violence.

“They planned an attack here against ambassadors of other countries here in the United States,” defence secretary said.

“So we’re not going to tolerate that, and we’ve made that clear. And as a result, the international community has come together. We have implemented strong diplomatic sanctions, we have implemented very strong economic sanctions, and we’re continuing to do that – sanctions that are in many ways crippling Iran, crippling their economy, isolating them from the rest of the world, and having an impact on Iran,” defence secretary said.

Panetta said that the basic message to Iran is that it has to change its behavior.