The US is 'considering all options'
Mr Bush is "leaving no stone unturned" in examining a "full range" of options for the country's strategy in dealing with the country, he said.
Attempting to change the Iraqi regime is something the United States "might have to do alone," he said.
Mr Powell said there was no doubt that Iraq, one of the three nations branded an "axis of evil" by Mr Bush last week, was developing nuclear weapons.
"The president is determined to keep this on the front burner and is looking at all the options that are available to him to deal with this in a decisive way," he said.
The comments follow Mr Powell's cold response to an Iraqi offer of dialogue with the UN "without preconditions" issued on Monday.
Mr Powell said that any discussion with Iraq should be "very short", repeating his demand that United Nations weapons inspectors be allowed to return to the county.
"The burden is upon this evil regime to demonstrate to the world that they are not doing the kinds of things that we suspect them of," he said.
Stalled talks
Iraq has accused the inspectors of spying, but the US secretary of state said if Baghdad did not have plans to develop weapons of mass destruction, it should not hesitate to let the inspectors return.
Iraq's talks offer came in a message from Mr Hussein to Mr Annan - conveyed by Arab league Secretary General Amr Moussa.
Mr Annan said he would meet an Iraqi delegation to discuss the issue of UN Security Council resolutions.
His spokesman told the French news agency AFP that the return of UN arms inspectors was not negotiable.
Talks between the UN chief and Iraqi officials broke off a year ago after Baghdad laid down conditions for resuming discussions, including an end to sanctions imposed after Iraq's invasion of Kuwait in 1990.
'Axis of evil'
The development comes amid mounting speculation that the United States is planning to widen its war against terrorism beyond Afghanistan to include Iraq.
In his State of the Union address last week, President George W Bush said Iraq was part of an "axis of evil" of countries believed to be developing weapons of mass destruction.
Iraq has refused to allow weapons inspectors back, since they were evacuated by the UN shortly before US and British military strikes in December 1998.
The former head of the UN Special Commission on Iraq, Richard Butler, has voiced concern that even if inspectors are allowed back into Iraq they will be prevented from working effectively.
The UN Security Council says sanctions on Iraq can only be lifted after it is satisfied Iraq is no longer seeking to produce chemical, nuclear or biological weapons.