Senators fear Iraq war may spill to Iran, Syria

Republican Sen. Chuck Hagel of Nebraska also expressed concern about potential future U.S. action in Iran or Syria.

"You cannot sit here today -- not because you're dishonest or you don't understand -- but no one in our government can sit here today and tell Americans that we won't engage the Iranians and the Syrians cross-border," said Hagel, a Vietnam veteran and possible 2008 presidential candidate.

Several Republican and Democratic senators pressured the Bush administration to talk directly to Iran, but Rice repeated the administration's reluctance to do so unless Iran abandons sensitive atomic work, a step Tehran has so far rejected.

Rice suggested Iran might use a dialogue about Iraq to extort U.S. concessions on its nuclear program, a trade-off U.S. officials have rejected. The United States believes the program is aimed at building weapons, while Tehran says it is for generating electricity.

The United States has sought to pressure Iran over its nuclear program through a unanimous U.N. Security Council sanctions resolution that passed in December, but the top U.S. intelligence official suggested Iran's economy was resilient.

"Record oil revenues and manageable debt suggest that Iran is capable, for now, of weathering shocks to the economy," U.S. intelligence chief John Negroponte said in written testimony submitted to the Senate Select Committee on Intelligence.

Separately, key lawmakers warned they would insist that the Bush administration impose sanctions on China if Beijing pursues an agreement to develop Iranian gas fields.

The two countries in December announced a preliminary deal, believed worth $16 billion, for China to invest in Iran's north Pars gas field and to construct plants to produce liquefied natural gas.

(Additional reporting Sue Pleming)