By Matt Spetalnick and Jeremy Pelofsky
Bush 'disappointed' Iran rejected offer made by world powers to end nuclear standoff.
US President George W. Bush and French President Nicolas Sarkozy said on Saturday a nuclear-armed Iran would be a threat to peace, as they sought to end tension over Iraq and forge a common front against Tehran.
As part of Bush's farewell tour of Europe, the leaders sat down to coordinate strategy for increasing international pressure on Iran over its nuclear programme and for shoring up international assistance for war-battered Afghanistan.
Iran ruled out any suspension of uranium enrichment on Saturday after the European Union's top diplomat delivered a world powers' offer of economic incentives to persuade it to stop such work.
"I am disappointed that the Iranian leaders rejected this generous offer out of hand," Bush told a joint news conference with Sarkozy. He said European leaders understood that a nuclear-armed Iran would be a "major blow to world peace".
Sarkozy agreed, saying: "Iran obtaining the atom bomb is unacceptable". He called for a "sanctions procedure" if Tehran remains defiant.
Bush and allies he has met during his trip - his last to Europe before he leaves office in January - have warned Tehran of further sanctions if it continues to develop nuclear know-how that could be used in bomb-building.
Bush's warm personal bond with Sarkozy - nicknamed "Sarko the American" - stands in marked contrast to the chilly relationship the US leader had with his predecessor, Jacques Chirac, a staunch critic of the 2003 US-led invasion of Iraq.
But Bush remains deeply unpopular in France, with many people indifferent to his visit and looking to his successor who will be elected in November.
Bush held talks with Sarkozy at the Elysee Palace after a welcoming ceremony on the steps outside, complete with a military honour guard with swords drawn and music playing.
Bush tried to reach out to the French on Friday, saying "no disagreement can diminish the deep ties between our nations", apparently referring to the differences over Iraq.
On Saturday, he was effusive in his praise of Sarkozy, who has won favour in Washington especially for taking a harder line against Iran than Chirac's former government.
Iran denies trying to build a nuclear bomb and insists its programme is strictly for electricity generation.
Bush also hailed Sarkozy for sponsoring a donors' conference that yielded $20 billion for rebuilding Afghanistan, where US, NATO and Afghan forces are fighting a resurgent Taliban.
At the news conference, Bush criticised Iran and Syria for supporting Hezbollah against Lebanon's government, and reiterated an Israeli-Palestinian peace deal is possible by the end of the year, a target widely viewed with scepticism.
Sarkozy, considered France's most pro-American president in decades, was treated to hamburgers and hot dogs at the Bush family estate in August and received a warm welcome on his first official visit to Washington in November.
Returning the favour, Sarkozy hosted Bush at a private dinner at the palace on Friday. Sarkozy's new wife, supermodel-turned-singer Carla Bruni, greeted US first lady Laura Bush separately, away from the cameras' glare.
Since taking office last year, Sarkozy has done much to roll back the legacy of French-US relations left by Chirac, who had angered the Bush administration with his outspoken opposition to military action against Iraq.
That prompted some indignant Americans to rename French fries "freedom fries" and boycott products such as French cheese, drawing heavy publicity but only a modest following.
France, like the rest of Europe, is already looking beyond Bush to a new administration under Democrat Barack Obama or Republican John McCain. Bush's critics say a change at the top is needed to start rebuilding America's image abroad.
A commentary in the Le Monde newspaper by the foreign ministers of France, Spain and Portugal said the end of the Bush era would provide a "historic opportunity" to forge a new US-European partnership "on equal footing".
Allies bristled at what they saw as "cowboy diplomacy" in Bush's first term, but they have seen improved cooperation recently as he seeks to salvage his foreign policy record. (Reuters)