"I hope we can solve it diplomatically, but I will never take any option off the table," Bush said.
Bush spoke a few hours after Defense Minister Ali Shamkhani said no country should dare to attack Iran, given its military strength and the lack of available information about its military capabilities.
Bush has long emphasized diplomacy as the best way to approach suspicions that Iran is developing nuclear weapons. Last month, he repeated that position.
"Diplomacy must be the first choice and always the first choice of an administration trying to solve an issue of, in this case, nuclear armament, and we'll continue to press on diplomacy," Bush said.
But the United States' intentions toward Iran are back in the headlines this week following the publication of a "New Yorker" magazine article by the prominent investigative journalist Seymour Hersh.
Hersh, who played a key role in breaking the Abu Ghurayb torture story earlier this year, now says the United States is getting ready to attack military sites in Iran.
According to his article, U.S. Special Forces have been conducting covert operations in Iran to identify nuclear, chemical, and missile sites for possible targeting. The operations have been reportedly going on since last summer.
In the article, Hersh quotes unidentified sources, including a former high-level intelligence official and a government consultant with close ties to the Pentagon. Hersh says his sources are serious and accurate.
But both the White House and the Pentagon have dismissed Hersh's report as inaccurate.
Lawrence DiRita, a Pentagon spokesman, said Hersh's article is "so riddled with errors of fundamental facts that the credibility of his entire piece is destroyed."
A White House spokesman also said the report is "riddled with inaccuracies."
Dan Bartlett, a spokesman for Bush, said Washington will continue to use diplomacy to convince Iran not to pursue nuclear weapons.
Iran's Supreme National Security Council also dismissed "The New Yorker" report.
State radio quoted Ali Aghamohammadi, head of the council's Propaganda Office, as saying it would not be easy to get U.S. forces into Iran and that it would be "naive" to believe Hersh's report.
Shahram Chubin is the director of research at Geneva Center for Security Policy (GCSP). He believes it is possible that U.S. forces have been conducting reconnaissance operations inside Iran but that it is a very high risks strategy.
"The Americans are both located in Iraq and Afghanistan and presumably all the borders cannot be sealed 100 percent, so infiltrating people into Iran isn't going to be difficult. But I would have thought it'd be very high risk to put in any groups of people for any sustained period of time in case they're discovered and the political repercussions will be quite severe," Chubin said.
Chubin says the Bush administration feels an urgency about the Iranian nuclear issue.
"The Iranians have been playing a very skillful diplomatic game in which they do not confront the international community, back off every time there is some revelation about the program as long as the inspections are taking place. The Americans are very concerned that they don't let this thing go on too long, because North Korea in a sense is a reminder to them that it can become too late to deal with the problem once the state has nuclear weapons capability," Chubin said.
Meanwhile, the European Union today also urged a diplomatic approach to Iran. EU powers Britain, Germany, and France have been engaged in talks to persuade Tehran to give up technology that could be used to build nuclear weapons.
But Hersh told the BBC yesterday that hawks in the Pentagon believes that the talks between the EU and Iran will fail. He says the Pentagon is preparing to neutralize suspected sites inside the Islamic Republic.
"The United States has no use at all for the current round of talks that have been going on for more than a year with the EU; we're staying out of it; we don't think it's going to work and when it fails -- I'm talking about the neoconservatives -- we want to be in a position to hit some targets hard," Hersh said.
Last November, British Foreign Minister Jack Straw called it "inconceivable" that the United States would target Iran.
Analyst Chubin says targeting Iran is a bad option.
"It's absolutely a last resort and it has absolutely no guarantee of success; there are too many facilities and there are so many unknowns about the facilities -- how advanced Iran's program is, whether Iran could recover very quickly from attacks on its major sites and whether Iranians have decided to develop nuclear weapons. We know that they certainly want to get close to it; they want the full fuel cycle, which implies an option for weapons program. But we still don't know whether they actually want a weapon or they just want the capability short of a weapon," Chubin said.
According to a "Financial Times" report, support for "regime change" in Iran is growing in the U.S. Senate. The paper wrote today that the proposed Freedom and Support Act calls on the administration to back regime change and promote alliances with opposition groups that renounce terrorism.