The US believes that Iran is using a civilian nuclear programme as a cover for efforts to build an atomic weapon.

Tehran insists that its uranium enrichment activities are simply to meet its energy needs.

'Dissuading Iran'

Hillary Mann Leverett, a former senior US diplomat, said that Obama's stated policy of trying to engage Iran had failed.

"Obama took his position during the primary to engage Iran and others - really in defiance of his own advisers - during the US presidential campaign," she told Al Jazeera.

"[The advisers] tried to walk him back the next day and he refused. It has always been Obama's strategy to engage Iran.

"I think what has happened is that Obama's policy has collapsed, and into the vacuum have stepped his opponents," she said, referring to Clinton.

A senior US official told the Reuters news agency that Clinton's comments should be seen as a arguments aimed at dissuading Iran from pursuing nuclear arms, rather than a sign that the United States is becoming resigned to action.

"She is making an argument to Iran about why they should not do this," the official said.

'Nuclear umbrella'

World powers agreed at a recent summit in Italy that they would assess whether Iran, which is already subject to UN sanctions, was co-operating over its nuclear activities when the G20 meets in Pittsburgh, Pennsylvania in late September.

The US military has bases in Gulf nations including Qatar, Bahrain, Kuwait and Saudi Arabia, as well as in Iran's neighbour, Iraq.

Billions of dollars of military aid is already given to some Arab states, while the adminstration of George Bush, the former US president, also suggested providing additional assistance to counter the perceived threat from Iran.

However, the idea of handing weapons to Arab nations in the region was met with criticism from Israel, Washington's foremost ally in the Middle East.

"I was not thrilled to hear the American statement from yesterday that they will protect their allies with a nuclear umbrella, as if they have already come to terms with a nuclear Iran ... I think that's a mistake" Dan Meridor, Israel's minister of intelligence and atomic energy, told Israel's Army Radio.