US President George W Bush has warned Iran it will face progressively tougher sanctions if it rejects an offer to freeze nuclear work and rejoin talks.
Bush has given Iran weeks rather than months to respond
He said Iran risks "further isolation" if it rejects the deal, which includes trade and security guarantees if Iran stops controversial nuclear work.
The EU and US want Iran to ease fears that is trying to build a nuclear bomb.
Iran, which maintains its nuclear work does not have a military aspect, has yet to formally respond to the offer.
Describing the offer as a "step forward", Iranian President Mahmoud Ahmadinejad has said his country is preparing to respond with suggestions of its own.
Iran will submit its views after its experts have finished examining the proposal, Iranian state TV quoted Mr Ahmadinejad as saying.
Mr Bush said an Iranian rejection of the offer "will result in action before the Security Council, further isolation from the world and progressively stronger political and economic sanctions".
Ahmadinejad has said Iran does not want nuclear weapons
Mr Bush has already said Iran has weeks rather than months to respond to the talks offer.
According to the BBC's State Department correspondent, Jonathan Beale, Mr Bush's latest remarks suggest US patience is wearing thin.
He says the US has again stepped up the pressure on Iran after weeks of restraint, spelling out the consequences if it does not accept the offer.
Addressing a US merchant navy academy on the eve of a summit with European leaders in Vienna, the US president said Iran's leaders should act for "more hopeful future for their people".
"They should accept our offer, abandon any ambitions to obtain nuclear weapons and come into compliance with their international obligations," he said.
"We hope they will accept our offer and voluntarily suspend these activities so we can work out an agreement that will bring Iran real benefits."
Iran has been offered a supply of enriched uranium from Russia as part of a range of incentives and penalties presented two weeks ago by the five permanent members of the UN Security Council - the US, UK, France, Russia and China - and Germany.
They are also thought to include offers of assistance to Iran in building a light-water nuclear reactor for civilian use, plus financial incentives.
The US recently changed its long-standing opposition to direct talks and said it would join negotiations with Iran if it suspended enrichment.
According to the AFP news agency, the EU has given Iran until 29 June to respond to the offer.
The agency quotes diplomats as saying EU foreign policy chief Javier Solana told Iran it must answer to the talks offer by that date, when foreign ministers from the G8 bloc meet in Moscow.
Iran has insisted it has not received any deadline.
Meanwhile, the former UN chief weapons inspector, Hans Blix, has reportedly said Iran could produce a nuclear bomb within five years if it is allowed to enrich uranium on an industrial scale.
"By 2010, 2011 they could probably have a nuclear weapon, if they want it," Mr Blix is quoted by the Associated Press news agency as saying.