July 21 (Bloomberg) -- Iran may face new sanctions unless it freezes nuclear enrichment, U.K. Prime Minister Gordon Brown said, after talks failed to resolve the stalemate between world powers and the Persian Gulf country over its atomic program.

``Iran now has a clear choice to make,'' Brown said in a speech to the Knesset in Jerusalem today. It must ``suspend its nuclear program and accept our offer of negotiations or face growing isolation and the collective response not of one nation but of many nations.''

The comments added to the pressure on Iran to suspend enrichment efforts that the U.S. and European allies say are a cover for weapons development. Secretary of State Condoleezza Rice said today that Iran cannot continue to ``stall'' and has two weeks to respond to incentives to freeze enrichment or face more sanctions.

On July 19, European Union foreign policy chief Javier Solana said after meeting in Geneva with Iran's top nuclear official, Saeed Jalili, that Iran needs to give a clear answer within two weeks to an offer of economic and diplomatic incentives.

The package was proposed by the five permanent members of the United Nations Security Council -- China, France, Russia, the U.K. and the U.S. -- plus Germany, and Solana said the world powers ``did not get'' what they were looking for at Geneva.

``We expected to hear an answer from the Iranians, but as has been the case so many times with the Iranians, what came through was not serious. And so Javier Solana decided to say to them two weeks,'' Rice told reporters accompanying her to Abu Dhabi today.

Fine-Tuning Sanctions

The Bush administration is fine-tuning financial penalties against Iran that would hit everything from gasoline imports to insurance, the Wall Street Journal reported today. The sanctions drive may include measures to impede Iranian shipping operations in the Persian Gulf, and its banking activities in Asia and the Middle East, the newspaper cited U.S. and European officials as saying.

Iranian President Mahmoud Ahmadinejad said after the meeting that the latest round of international talks was a ``step forward'' in resolving the dispute. Iran says it wants nuclear power to generate electricity, not for weapons.

The U.K. has already proposed sanctions designed to affect Iran's oil production, including refusing to supply spare parts to the holder of the world's second-biggest oil and natural gas reserves. With Iran snubbing Western efforts to persuade it to halt enrichment, and a tropical storm headed toward the Gulf of Mexico, crude oil rose from a six-week low.

August delivery crude rose $2.32, or 1.8 percent, to $131.20 barrel at the 2:30 p.m. close of floor trading on the New York Mercantile Exchange. Futures are up 74 percent from a year ago.

`Global Threat'

In welcoming Brown as the first U.K. prime minister to address the Israeli parliament, Prime Minister Ehud Olmert said that Iran should be seen as a menace to the entire world.

``The threat is not just against Israel,'' Olmert told lawmakers. ``It is a global threat and it must be confronted by an international front that is united, determined and most importantly, immediate.''

Iran test-fired missiles on July 9 and 10. One of them, the Shahab-3, has a range that would allow it to reach Israel and U.S. bases in the Persian Gulf. EU foreign ministers will meet again tomorrow to discuss Iran.

Brown's spokesman, Michael Ellam, speaking to reporters ahead of the speech, said the U.K. is prepared to ``rule nothing out'' in imposing future sanctions if Iran doesn't accept the UN offer.

The U.K. is determined to prevent an Iranian nuclear weapons program and will use its partnerships with the UN, the EU and the U.S. to impose further restrictions if necessary, Brown said today.

`True Friend'

In June, Brown secured EU agreement to freeze the overseas assets of Bank Melli Iran, which Britain, the U.S. and the UN had singled out as a target.

The U.K. premier told Israeli lawmakers that ``Britain is your true friend'' and that the country can rely on British support if it comes under threat from Iran.

``So to those who question Israel's very right to exist, and threaten the lives of its citizens through terror, we say: the people of Israel have a right to live here, to live freely and to live in security,'' Brown said.

``And to those who believe that threatening statements fall upon indifferent ears, we say in one voice: that it is totally abhorrent for the president of Iran to call for Israel to be wiped from the map of the world,'' he said.

`Iranian Game'

Olmert's spokesman, Mark Regev, told reporters in Jerusalem earlier today, ``I think everyone understands the Iranian game plan. They want to keep on talking and talking and talking and at the same time they want to keep on enriching'' uranium.''

The worldwide quest to secure reliable oil and gas supplies is undermining European and U.S. diplomatic attempts to pressure Tehran's government, which is drawing investment from China, India and Pakistan.

``We have to prepare ourselves for what may be a major shift in power in the Middle East over the next five years,'' said Michael Cox, a professor at the London School of Economics. ``Iran feels that it should be the dominant power in the region.

``There may be a nuclear Iran in the future, in which case we'll have to fall back to the Cold War strategy of deterrence,'' said Cox, who runs the school's Center for Diplomacy and Strategy.

A deal to dissuade Iran's government from continuing its nuclear work would require ``massive incentives'' beyond those that have been offered, Cox said. ``Iran is on a roll. Nobody's got a simple answer and sanctions alone won't do it against a regime selling oil at $130 per barrel.''

Palestinian Conflict

At the Knesset, Brown told lawmakers that a ``historic hard- won and lasting peace'' is ``within your grasp'' and that Palestinian Authority President Mahmoud Abbas and Prime Minister Salam Fayyad have offered ``courageous leadership in the process towards peace.''

``It is vital also that both sides now create the conditions for a final agreement,'' Brown said. He urged the Palestinians to act ``with persistence and perseverance against the terrorists.''

He called on Israel to take new steps on ``freezing, and withdrawing from, settlements.''

To contact the reporter on this story: Kitty Donaldson in London at kdonaldson1@bloomberg.net.

Last Updated: July 21, 2008 15:13 EDT