If Iran continues on its current course, Cheney said the US and other nations are "prepared to impose serious consequences". He made no specific reference to military action.
"The countries that feel threatened ... should prepare for defense, and even counterattack"
Adolfo Talpalar, Stockholm, Sweden
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But on Thursday, the top officer in the US military said the US has the resources to attack Iran if needed despite the strains of wars in Iraq and Afghanistan.
Navy Admiral Michael Mullen, the chairman of the joint chiefs of staff, said striking Iran is a last resort, and the focus now is on diplomacy to stem Iran's nuclear ambitions, but "there is more than enough reserve to respond" militarily if need be.
"We will not allow Iran to have a nuclear weapon," he said. Cheney's speech came close on the heels of a warning from the US president that a nuclear Iran could lead to "World War III".
At a news conference on Wednesday, George Bush suggested that if Iran obtained nuclear weapons, it could lead to a new world war.
World war talk
Cheney said the ultimate goal of the Iranian leadership is to establish itself as the hegemonic force in the Middle East and undermine a free Shia-majority Iraq as a rival for influence in the Muslim world.
Iran's government seeks "to keep Iraq in a state of weakness to ensure Baghdad does not pose a threat to Tehran", he said.
While he was critical of the Iranian government and Mahmoud Ahmedinejad, the Iranian president, Cheney called Iran "a place of unlimited potential", and said it has the right to be free of tyranny".
Cheney also accused of Iran of having a direct role in the deaths of US soldiers in Iraq and said the government has "solidified its grip on the country" since coming to power in the 1979 Islamic revolution that overthrew the shah.