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A second key factor shaping the future of the region will be whether Iran persists in its dangerous and destabilizing policies.

Iran is a great and historic nation, but the Iranian regime has opted to stand against the community of nations by pursuing nuclear weapons capabilities, supporting militants opposed to the peace process, rearming Hizballah, and engaging in Holocaust denial. Iran is pursuing a duplicitous policy of supporting the government of Iraq while at the same time enabling armed groups to destabilize Iraq. In Afghanistan, Tehran is also undermining the democratically elected government of President Karzai by cynically supporting the Taliban and other elements.

On the nuclear issue, the international community has given the Iranian regime a choice. Iran's leaders can work toward diplomatic resolution of these issues, comply with its international obligations, and benefit from wider engagement and cooperation. If Iran refuses to do so, it will pay a steadily increasing price in terms of financial hardship, diplomatic isolation, and erosion of Iran's prestige.

The Security Council has unanimously imposed Chapter VII sanctions on Iran's nuclear and ballistic missile programs. The United States and the other Permanent Members of the Security Council are working closely together to seek a diplomatic solution by increasing pressure on Iran's government to abandon its nuclear ambitions. But we cannot rule out other options if diplomacy proves to be ineffective.

With respect to other issues, several important actions have already been taken. In Iraq, the United States has acted against Iranian elements seeking to destabilize Iraq. In Afghanistan, the United States is redoubling its security assistance. And we continue to work on the full implementation of Security Council Resolution 1701, emphasizing the importance that all governments, including Iran, refrain from transferring arms into Lebanon without the consent of the Lebanese government and cease and desist from activities which impinge upon that country's sovereignty. Preventing the flow of arms and finances from Iran to forces whose intent is to disrupt the fragile Israeli-Palestinian peace process remains a top priority.

As we pursue this approach, we continue to stress that the international community has a dispute with the Iranian regime, not the Iranian people.

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