Straw, pressed by a parliamentary committee about the possibility of Western powers taking military action against Iran over its atomic ambitions, repeated on Wednesday that such a step was not on the agenda and insisted he would pursue diplomacy.
"I don't believe that even if Iran were in that position (of having the capability to make nuclear weapons) that there would be nothing the international community could do about it short of ... military action," Straw told the committee.
He drew a comparison with reclusive North Korea, which the West suspects already has atomic weapons.
"There is a process which I am reasonably confident will lead to a resolution by non-military means," he said.
Amid international concern that Iran wants to make a nuclear bomb, the UN nuclear watchdog on Saturday voted to report Iran to the Security Council, a move which could eventually lead to sanctions.
Straw declined to say what action the Security Council might take, but it will do nothing before an International Atomic Energy Agency report due next month.
"There is a process which I am reasonably confident will lead to a resolution by non-military means"
British foreign secretary
Although the West was very suspicious that Iran wants to develop nuclear weapons, there was no proof, said Straw. Iran denies it wants to build arms and says it needs nuclear technology for power generation.
"I am conscious of the fact, not least because of the experience in respect of Iraq, we have to be very precise about what we are claiming," said Straw.
Before the 2003 invasion of Iraq, Britain and the United States argued that Saddam Hussein had weapons of mass destruction, a claim that proved unfounded and raised major questions about the grounds for war.