SYDNEY, Australia — Vice President Dick Cheney on Saturday renewed Washington's warning to Iran that "all options" are on the table if the country continues to defy U.N.-led efforts to end Tehran's nuclear ambitions.

At a joint news conference with Prime Minister John Howard during a visit to Australia, Cheney also said Washington was "comfortable" with Britain's decision to withdraw troops from Iraq and that it was up to Australia to decide if it would do the same.

Cheney said the United States was "deeply concerned" about Iran's activities, including the "aggressive" sponsoring of terrorist group Hezbollah and inflammatory statements by President Mahmoud Ahmadinejad.

He said top U.S. officials would meet soon with European allies to decide the next step toward planned tough sanctions against Iran if it continues enriching uranium.

"We worked with the European community and the United Nations to put together a set of policies to persuade the Iranians to give up their aspirations and resolve the matter peacefully, and that is still our preference," Cheney said.

"But I've also made the point, and the president has made the point, that all options are on the table," he said, leaving open the possibility of military action.

The International Atomic Energy Agency reported on Thursday that Iran had not only ignored a U.N. Security Council ultimatum to freeze its enrichment program, but had expanded the program by setting up hundreds of centrifuges. Enriched uranium fuels nuclear reactors but, enriched further, is used in nuclear bombs.

The IAEA report came after the expiration Wednesday of a 60-day grace period for Iran to halt uranium enrichment.

Ahmadinejad said on Thursday it was of no importance if countries did not believe Iran's nuclear activities were peaceful, and said the country would resist "all bullies."

Howard said efforts to keep Iran in check would be hampered if the United States and its allies lose the Iraq war.

"I can't think of a country whose influence and potential clout would be more enhanced in that part of the world than Iran's could be if there were to be a coalition defeat in Iraq," Howard said.

On Iraq, Cheney sidestepped a question about whether the White House had asked the British government to redeploy troops to another part of Iraq rather than withdraw them.

British Prime Minister Tony Blair has outlined a plan to withdraw about 1,600 troops from southern Iraq in the coming months, and to reduce Britain's 7,100-strong contingent further by late summer.

"They are going to continue to have a major presence there. They are also ... beefing up their operations in Afghanistan," Cheney said. "So we are very comfortable with that decision."