April 18 (Bloomberg) -- President George W. Bush, asked whether the U.S. would consider a nuclear strike to prevent Iran from developing atomic weapons, said ``all options are on the table,'' while stressing diplomacy remains his first choice.

``We want to solve this issue diplomatically, and we are working hard to do so,'' Bush said today at the White House.

The U.S. is working with France, Germany and Great Britain and other nations on a ``united effort'' to persuade Iran to halt its effort to enrich uranium, Bush said. The matter will be a subject of discussion with President Hu Jintao of China during his visit to Washington this week, Bush said.

Tensions have been escalating between the U.S. and Iran over the Islamic republic's effort to produce nuclear fuel that could be used for a weapon. The New Yorker magazine and the Washington Post this month reported the U.S. is developing contingency plans for military action against Iran, including the use of nuclear weapons. Earlier today, Iran's President Mahmoud Ahmadinejad said his country's forces will use ``the latest technology'' against enemies and ``cut off the hand of any aggressor.''

The question of how soon Iran could build a nuclear weapon gained urgency last week after Ahmadinejad said his country had enriched uranium sufficiently to produce nuclear fuel. He said 164 centrifuges were used. Deputy nuclear chief Mohammad Saeedi said Iran planned to install 3,000 centrifuges at its Natanz plant this year, then expand to 54,000. Nuclear experts say that's enough to build a bomb.

UN Discussion

Envoys from the United Nations Security Council's permanent members, and Germany, are meeting in Moscow today to discuss the dispute.

Nicholas Burns, the U.S. undersecretary of state for political affairs, said in an interview with CBS News that the U.S. is negotiating with other countries on the tactic to be used by the international community in preventing Iran from gaining nuclear weapons.

``It's that specific tactical step forward we have to get agreement on in the next couple of weeks,'' he said.

Ahmadinejad has stepped up his rhetoric in the confrontation.

``The army must always be equipped and ready, and have mastered the latest technology, to respond to any aggression,'' Ahmadinejad said today during a military parade south of Tehran, according to state-run news agencies. He vowed to ``have a dialogue from a position of power.''

Crude oil jumped to a record on concern that the standoff may lead to a cut of exports from the world's fourth-largest producer. Oil for May delivery rose 25 cents, or 0.4 percent, to $70.55 a barrel at 10:53 a.m. on the New York Mercantile Exchange. Oil touched $70.88, the highest since trading began in 1983. Prices are 40 percent higher than a year ago.

Nuclear Dispute

The Security Council demanded the suspension of Iran's program by the end of this month, during which the UN's nuclear agency is checking Iranian claims that it produced a supply of enriched uranium. Iran maintains its nuclear program is intended only for the production of electricity.

Iran has expanded its underground nuclear sites in the cities of Isfahan and Natanz, the Washington-based Institute for Science and International Security said in an April 14 report, citing recent commercial satellite imagery.

That may be a sign Iran is gearing up to resist U.S. military action. The New Yorker magazine on April 8 reported that the U.S. may use air strikes and tactical nuclear weapons to destroy the underground facilities. The Post reported April 9 that the contingency plans are part of a strategy to increase pressure on Iran.

Bush on April 10th called such reports ``just wild speculation.''

Thomas Fingar, deputy U.S. director of national intelligence, last week said Iran is still ``some years away'' from developing a nuclear bomb. U.S. intelligence estimates say that Iran couldn't produce a nuclear weapon with its own materials before 2010.

To contact the reporters on this story: Catherine Dodge in Washington at Cdodge1@bloomberg.net; Ladane Nasseri in Tehran at lnasseri@bloomberg.net.

Last Updated: April 18, 2006 19:20 EDT