It's the first U.S. response to Iran's reply. In the statement, State Department spokesman Gonzalo Gallegos also says Washington is consulting with UN Security Council members on how to proceed.
The U.S. statement reminds Tehran that the Security Council requires full and verifiable suspension of all uranium-enrichment activity.
Earlier today, White House spokeswoman Dana Perino noted the package is tied to Iran halting its uranium enrichment. France today also emphasized that point.
"We acknowledge that Iran considers its response as a serious offer and we will review it," Perino said. "The response, however, falls short of the conditions set by the Security Council, which require the full and verifiable suspension of all enrichment-related and reprocessing activities. We are closely consulting with the other members of the Security Council on the next steps."
U.S. President George W. Bush discussed Iran's response in a telephone call with UN Secretary-General Kofi Annan, who is expected to travel to Iran in the coming days.
Russia's Foreign Ministry today said it is premature to discuss sanctions against Iran since the August 31 deadline has not yet passed.
(compiled from agency reports)
Afraid Of Sanctions?
WHAT DOES TEHRAN REALLY THINK? On August 22, Radio Farda correspondent Fatemeh Aman spoke with Alex Vatanka, Eurasia editor for Jane's Information Group, by telephone from Alexandria, Virginia. Vatanka discussed the possible impact that comprehensive sanctions could have for Iran.
Radio Farda: Some Iranian authorities are trying to create the impression that they aren't concerned about the possibility of international sanctions against it. They emphasize that what Iran has achieved so far has happened despite the sanctions already in place against it. Are they really not afraid of sanctions?
Vatanka: I think that what the Iranians are trying to do is to continue to play this balancing act. On the one hand, they are trying to say, "Look, we have done without you for 27 years; we can continue." On the other hand, if you look at every other major Iranian overture toward the U.S., obviously what they are hoping to do is remove those sanctions. It is the sanctions that have been the biggest obstacle to a genuine expansion in the Iranian economy. It is the sanctions and U.S. policies vis-a-vis Iran that have, for instance, kept Iran from joining the World Bank. It is sanctions and so on that have made the Iranian oil industry have such a tough time in bringing investment into the strategic oil and gas sectors. People like [former Iranian President Ali Akbar Hashemi-]Rafsanjani back in the mid 1990s even kept certain fields untouched because the idea was that U.S. companies should have those once the sanctions were lifted.
I think sanctions are quite important to the Iranians, but at the same time what they are trying to say is, "Don't assume that we are going to fall off our chair just because you mentioned the sanctions card." It is part of a kind diplomatic chess game going on by Tehran. But remember if we look and listen to Iranian reformists, this is being openly debated inside Iran. The question that is being asked of [President Mahmud Ahmadinejad and his entourage] is, "What is the ultimate objective?" Is it just Islamic independence? Is it just the ability to enrich uranium? The debate in Iran by the reformists -- and I think a lot of people would sympathize with this -- is, "What are we being sanctioned for exactly and what policies do you have to make sure that those sanctions don't hit us harder than we have already been hit?"
Remember, the big issue here is this: Iran has been sanctioned by the U.S. Iran has never faced comprehensive United Nations sanctions. The Iranian people have never suffered on a scale that the Iraqi people, for instance, suffered because of such sanctions. So it is kind of disingenuous of these senior leaders to pretend that Iran has already gone through comprehensive sanctions. Iran has not. And it will be totally different set of circumstances that will have a totally different impact on Iranian society and the economy, should the UN impose comprehensive sanctions on the country.
THE COMPLETE PICTURE: RFE/RL's complete coverage of controversy surrounding Iran's nuclear program.