KRANJ, Slovenia - Opening a farewell tour of Europe, President Bush won European support on Tuesday to consider additional punitive sanctions against Iran, including restrictions on its banks, if Iran rejects a package of incentives to suspend its uranium enrichment program.

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President Bush at Brdo Castle in Kranj, Slovenia, with, from left, Jose Manuel Barroso, the president of the European Commission; Janez Jansa, prime minister of Slovenia; and Javier Solana, the European Union's foreign policy chief.

Iran has begun transferring billions of dollars from European banks to Iranian and Asian banks, and buying gold and equities, according to reports in the Iranian news media, apparently to protect its windfall oil revenue from any new sanctions.

Mr. Bush arrived in Slovenia at the start of a European tour that will take him to Berlin, Rome, Paris, London and Belfast, Northern Ireland. A summit meeting with European Union leaders here was part of an effort to persuade them to adopt a stronger line toward Iran.

Iran's leaders, Mr. Bush said, "can either face isolation, or they can have better relations with all of us if they verifiably suspend their enrichment program."

At a news conference after the summit meeting, Mr. Bush warned what would happen if Iran acquired a nuclear weapon. He said: "The free world is going to say, 'Why didn't we do something about it at the time, before they developed it?' And so now is the time for there to be strong diplomacy."

A joint statement issued after the meeting urged Iran to "comply with its international obligations concerning its nuclear activities" and reaffirmed Western commitments to a "dual-track strategy," employing the threat of punitive sanctions along with incentives to Iran. The European Union's foreign policy chief, Javier Solana, is to travel to Tehran to present the new package of incentives this weekend.

The communiqué coincided with heightened tensions over Iran's nuclear program. The International Atomic Energy Agency in Vienna registered "serious concern" last month about Iran's suspected research into the development of nuclear weapons.

The issue became even more pressing after Israel's transportation minister, Shaul Mofaz, warned last week that an Israeli attack on Iranian nuclear sites would be "unavoidable" if weapons programs proceeded.

Some analysts said the language of the joint communiqué on Tuesday appeared to try to ease that threat.

"I think this was a European attempt to show the Bush administration that Europe takes the threat seriously and to try to continue to prevent a situation where Israel or the United States might turn to the military instrument," said Julianne Smith of the Center for Strategic and International Studies in Washington.

Mr. Bush expressed sympathy for Israeli concerns about Iran's intentions, telling a questioner at the news conference, "If you were living in Israel, you'd be a little nervous, too, if a leader in your neighborhood announced that they - he'd like to destroy you."

But Mr. Bush also appeared to play down interest in a military option, saying he was leaving behind "a multilateral framework" to address Iran. And the joint statement pointed to the possibility of new measures to "ensure Iranian banks cannot abuse the international banking system to support proliferation and terrorism," though it gave no specifics.

En route to Berlin, the next stop on Mr. Bush's trip, his national security adviser, Stephen J. Hadley, also stressed that the focus was on the carrot of incentives and the stick of more sanctions. "I think everybody is on the same page, really," he said. "We're going to make this offer, and if the Iranian regime denies the Iranian people the benefit of the offer, then we're going to have to turn up the pressure."

Britain, France and Germany are at the forefront of European diplomacy on Iran, and Mr. Bush is seeking their endorsement of stronger United Nations sanctions.

The shift of assets out of European banks was ordered by President Mahmoud Ahmadinejad, Iranian newspapers reported Tuesday. The deputy foreign minister for economic affairs, Mohsen Talaie, was quoted as confirming the shift, saying, "We decided to exchange our foreign assets to increase our security."

Some Iranians publicly expressed worries that shifting the assets had been unwise. The daily newspaper Etemad Melli quoted Ibrahim Razaghi, an economist, as warning that Asian banks could not be reliable because of their dependence on Europe's economy.

Saeed Leylaz, an economist, warned in the daily newspaper Kargozaran that pressure on Iran would continue as long as authorities pursued aggressive policies that pushed the country further into isolation at a time when the economy was highly dependent on imports.

"We say nuclear energy is our right," he wrote in a front-page column, referring to the country's nuclear program. "The problem is rooted in the contradiction between our diplomacy and economic policies."

Slovenia, the host of the summit meeting on Tuesday, considers itself the most stable and prosperous of Balkan nations and holds the rotating presidency of the 27-nation European Union until July.

Mr. Bush saluted the country and its prime minister, Janez Jansa, saying the first stop on his first visit to Europe as president was Slovenia, and now "my last visit as U.S. president to Europe includes a first stop in Slovenia. It's a fitting circle."

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President Bush, who met with Chancellor Angela Merkel, left all options open to respond to Tehran's nuclear program.

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President Bush on Wednesday before boarding Air Force One to leave Berlin for Rome during his six-nation European tour.

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Iranian President Mahmoud Ahmadinejad delivered a speech in the city of Shahr-E- Kord, Iran, Wednesday.

In Germany for meetings with Chancellor Angela Merkel, President Bush emphasized again on Wednesday that "all options are on the table" in any response to what is suspected of being Iranian research into developing nuclear weapons. Those options would include the possibility of military force, he said.

Even as Mr. Bush won new support from the Europeans, President Mahmoud Ahmadinejad of Iran responded by mocking attempts to rein in his country's nuclear program, which Iran maintains is for peaceful development of nuclear energy. Mr. Ahmadinejad said in a televised speech in Iran that the West "cannot do anything" and singled out Mr. Bush as a lame duck who had failed at every attempt to hurt Iran.

"Bush's time is up, and he was not able to harm even one centimeter of our land," the state-run news agency, IRNA, quoted Mr. Ahmadinejad as saying.

Iran's intransigence appears to be unifying the Europeans, who remain divided over how severely to punish Iran for not complying with United Nations Security Council resolutions that demand that it stop enriching uranium or face sanctions. Iran has called the resolutions illegal and unjustified.

During meetings at Schloss Meseberg, the German government guesthouse here, Mrs. Merkel joined Mr. Bush in calling for more sanctions against Iran if it did not suspend uranium enrichment.

Mr. Bush won European support on Tuesday for consideration of additional sanctions, including restrictions on Iran's banks, if the government rejects an incentive package intended to persuade Iranian leaders to suspend uranium enrichment.

But Mr. Bush's remarks during an appearance with Mrs. Merkel also illustrated the distance between them, as Mrs. Merkel emphasized diplomacy and the need to enforce the current sanctions.

The Iranians appear to believe that, should the crisis over the nuclear program deepen, rather than supporting Mr. Bush, his European allies would probably rein him in as well as the increasingly militant Israelis, who have raised the possibility of strikes on what they suspect are Iranian nuclear facilities.

"We do not think there is a chance for a military strike," Iran's foreign minister, Manouchehr Mottaki, said Wednesday at a news conference in Paris. He dismissed the threat of an Israeli attack as "not serious."

Javier Solana, the European Union's foreign policy chief, is to arrive in Tehran on Saturday to present a repackaged proposal that includes incentives for Iran to stop its enrichment program, which Iran has previously rejected, put together by the five permanent members of the Security Council plus Germany.

Though Mrs. Merkel supported Mr. Bush during his visit here, she seemed to signal that she did not advocate the kind of actions he has called on countries to take in addition to the United Nations sanctions, as for example the United States already does. Further measures "need to be negotiated in the Security Council of the United Nations," Mrs. Merkel said. "The more countries are in on this, the more effective the impact will be on Iran."

While Mr. Bush has insisted that he has not ruled out a military response, he did not discuss the option with Mrs. Merkel, the deputy national security adviser for regional affairs, Judy Ansley, told reporters flying to his next stop, Rome. Mr. Bush clearly stated that his "first choice, of course, is to solve this diplomatically."

The standoff with Iran has not occurred in a vacuum, and is influenced as well by European attitudes toward the war in Iraq and the NATO mission in Afghanistan. Opposition in many corners of Europe, particularly in Germany and France, to the decision by the United States to proceed to war in Iraq without the approval of the Security Council continues to haunt him here.

Responding to a question about an interview by The Times of London in which he expressed regret over his words before the Iraq invasion, Mr. Bush said, "I could have used better rhetoric to indicate that one, we tried to exhaust the diplomacy in Iraq; two, that I don't like war." But he said he still believed that removing Saddam Hussein was right, adding, "You don't get to do things over in my line of work."

Mr. Bush also expressed confidence that his administration would reach a security agreement with Iraq that would authorize American forces and operations after a United Nations mandate expires at the end of the year. The negotiations face opposition in Congress and, increasingly, in Iraq. Iran's supreme leader warned the Iraqi prime minister, Nuri Kamal al-Maliki, not to ratify an agreement.

"He appreciates our presence there," Mr. Bush said of Mr. Maliki, "and he understands that we're returning on success; as the situation merits, and the situation improves, we're bringing our troops home."

Mr. Bush weighed in strongly on the debate in Germany over the mission in Afghanistan, thanking Germans directly "for their contributions to helping the people of Afghanistan realize the blessings of a free society."

While conceding that "this is a controversial subject here," Mr. Bush framed the German debate over sending more troops to Afghanistan in human terms by saying that he hoped "people here think of young girls who couldn't go to school in the past but now can; or think of mothers who bring their babies to health clinics for the first time."

Germany's mandate for its troop deployment in Afghanistan, now limited to 3,500 soldiers, expires in October. The German government has come under significant pressure from its allies, including the United States, to deploy more troops and to send them to southern Afghanistan, the site of much of the fiercest fighting. Opinion polls here consistently show that a wide majority of Germans oppose their country's military presence in Afghanistan.

Mr. Bush is on his last scheduled trip to Europe as president. Mrs. Merkel and Mr. Bush, who have always been on better terms than Mr. Bush was with Mrs. Merkel's predecessor, Gerhard Schröder, seemed comfortable together, fielding questions from reporters and strolling the gardens of Schloss Meseberg.

Mrs. Merkel said they discussed a range of issues, including trade, biofuels and the Middle East. On one of Mrs. Merkel's signature issues, climate change, Mr. Bush signaled that there would be room for an agreement that would include not only the United States and the European Union, but also China and India.

WASHINGTON - Israel carried out a major military exercise earlier this month that American officials say appeared to be a rehearsal for a potential bombing attack on Iran's nuclear facilities.

Several American officials said the Israeli exercise appeared to be an effort to develop the military's capacity to carry out long-range strikes and to demonstrate the seriousness with which Israel views Iran's nuclear program.

More than 100 Israeli F-16 and F-15 fighters participated in the maneuvers, which were carried out over the eastern Mediterranean and over Greece during the first week of June, American officials said.

The exercise also included Israeli helicopters that could be used to rescue downed pilots. The helicopters and refueling tankers flew more than 900 miles, which is about the same distance between Israel and Iran's uranium enrichment plant at Natanz, American officials said.

Israeli officials declined to discuss the details of the exercise. A spokesman for the Israeli military would say only that the country's air force "regularly trains for various missions in order to confront and meet the challenges posed by the threats facing Israel."

But the scope of the Israeli exercise virtually guaranteed that it would be noticed by American and other foreign intelligence agencies. A senior Pentagon official who has been briefed on the exercise, and who spoke on condition of anonymity because of the political delicacy of the matter, said the exercise appeared to serve multiple purposes.

One Israeli goal, the Pentagon official said, was to practice flight tactics, aerial refueling and all other details of a possible strike against Iran's nuclear installations and its long-range conventional missiles.

A second, the official said, was to send a clear message to the United States and other countries that Israel was prepared to act militarily if diplomatic efforts to stop Iran from producing bomb-grade uranium continued to falter.

"They wanted us to know, they wanted the Europeans to know, and they wanted the Iranians to know," the Pentagon official said. "There's a lot of signaling going on at different levels."

Several American officials said they did not believe that the Israeli government had concluded that it must attack Iran and did not think that such a strike was imminent.

Shaul Mofaz, a former Israeli defense minister who is now a deputy prime minister, warned in a recent interview with the Israeli newspaper Yediot Aharonot that Israel might have no choice but to attack. "If Iran continues with its program for developing nuclear weapons, we will attack," Mr. Mofaz said in the interview published on June 6, the day after the unpublicized exercise ended. "Attacking Iran, in order to stop its nuclear plans, will be unavoidable."

But Mr. Mofaz was criticized by other Israeli politicians as seeking to enhance his own standing as questions mount about whether the embattled Israeli prime minister, Ehud Olmert, can hang on to power.

Israeli officials have told their American counterparts that Mr. Mofaz's statement does not represent official policy. But American officials were also told that Israel had prepared plans for striking nuclear targets in Iran and could carry them out if needed.

Iran has shown signs that it is taking the Israeli warnings seriously, by beefing up its air defenses in recent weeks, including increasing air patrols. In one instance, Iran scrambled F-4 jets to double-check an Iraqi civilian flight from Baghdad to Tehran.

"They are clearly nervous about this and have their air defense on guard," a Bush administration official said of the Iranians.

Any Israeli attack against Iran's nuclear facilities would confront a number of challenges. Many American experts say they believe that such an attack could delay but not eliminate Iran's nuclear program. Much of the program's infrastructure is buried under earth and concrete and installed in long tunnels or hallways, making precise targeting difficult. There is also concern that not all of the facilities have been detected. To inflict maximum damage, multiple attacks might be necessary, which many analysts say is beyond Israel's ability at this time.

But waiting also entails risks for the Israelis. Israeli officials have repeatedly expressed fears that Iran will soon master the technology it needs to produce substantial quantities of highly enriched uranium for nuclear weapons.

Iran is also taking steps to better defend its nuclear facilities. Two sets of advance Russian-made radar systems were recently delivered to Iran. The radar will enhance Iran's ability to detect planes flying at low altitude.

Mike McConnell, the director of national intelligence, said in February that Iran was close to acquiring Russian-produced SA-20 surface-to-air missiles. American military officials said that the deployment of such systems would hamper Israel's attack planning, putting pressure on Israel to act before the missiles are fielded.

For both the United States and Israel, Iran's nuclear program has been a persistent worry. A National Intelligence Estimate that was issued in December by American intelligence agencies asserted that Iran had suspended work on weapons design in late 2003. The report stated that it was unclear if that work had resumed. It also noted that Iran's work on uranium enrichment and on missiles, two steps that Iran would need to take to field a nuclear weapon, had continued.

In late May, the International Atomic Energy Agency reported that Iran's suspected work on nuclear matters was a "matter of serious concern" and that the Iranians owed the agency "substantial explanations."

Over the past three decades, Israel has carried out two unilateral attacks against suspected nuclear sites in the Middle East. In 1981, Israeli jets conducted a raid against Iraq's nuclear plant at Osirak after concluding that it was part of Saddam Hussein's program to develop nuclear weapons. In September, Israeli aircraft bombed a structure in Syria that American officials said housed a nuclear reactor built with the aid of North Korea.

The United States protested the Israeli strike against Iraq in 1981, but its comments in recent months have amounted to an implicit endorsement of the Israeli strike in Syria.

Pentagon officials said that Israel's air forces usually conducted a major early summer training exercise, often flying over the Mediterranean or training ranges in Turkey where they practice bombing runs and aerial refueling. But the exercise this month involved a larger number of aircraft than had been previously observed, and included a lengthy combat rescue mission.

Much of the planning appears to reflect a commitment by Israel's military leaders to ensure that its armed forces are adequately equipped and trained, an imperative driven home by the difficulties the Israeli military encountered in its Lebanon operation against Hezbollah.

"They rehearse it, rehearse it and rehearse it, so if they actually have to do it, they're ready," the Pentagon official said. "They're not taking any options off the table."

WASHINGTON - For more than five years now, President Bush and Vice President Dick Cheney have made clear that they did not want to leave office with Iran any closer to possessing nuclear weapons than when they took office.

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Russia's foreign minister, Sergey V. Lavrov, said the United States had not proved that Iran was pursuing nuclear weapons.

"The nations of the world must not permit the Iranian regime to gain nuclear weapons," Mr. Bush said in February 2006. The United States is prepared to use its naval power "to prevent Iran from gaining nuclear weapons and dominating this region," Mr. Cheney said in 2007 from a Navy carrier in the Persian Gulf.

But with seven months left in this administration, Iran appears ascendant, its political and economic influence growing, its historic foes in Iraq and Afghanistan weakened, and its nuclear program continuing to move forward. So the question now is: Are Mr. Bush and Mr. Cheney resigned to leaving Iran more powerful than they found it when they came to office?

The evidence is mixed. For all the talk to the contrary, Bush administration officials appear to have concluded that diplomatic efforts to rein in Iran's nuclear ambitions will not yield any breakthroughs this year.

Despite a recent flurry of efforts to tighten sanctions on Iran, top officials on both sides of the Atlantic, in recent interviews, had no expectations that Iran's rulers would make any concessions, particularly on the critical issue of suspending the enrichment of uranium, while Mr. Bush remained in office.

On the military front, the picture is fuzzier. Two senior administration officials said that barring a move by Israel, which one characterized as "the wild card" on the Iranian issue, this administration would not be likely to pursue military strikes against Iranian nuclear targets.

Mr. Bush himself seemed to signal as much at the start of his European tour last week in Slovenia, when he said of Iran that he expected to "leave behind a multilateral framework to work on this issue," a statement that seemed to suggest that military action against Iran may no longer be on the table.

But there remains the possibility that Israel could force the hand of the Bush administration, foreign policy analysts and diplomats said. Israel carried out a three-day military exercise this month that American intelligence officials say appeared to have been a rehearsal for a potential strike on nuclear targets in Iran.

Israeli officials have tried to put pressure in recent months on the Bush administration to consider such a strike if Iran did not abandon its nuclear program, and the exercise may have been intended as a new signal that Israel might be willing to act alone if the United States did not.

"Israel prefers this threat be dealt with peacefully, by dramatically increasing sanctions and maintaining a credible resolve to keep all options on the table," said Sallai Meridor, the Israeli ambassador to the United States. "But time is running out."

Iran, he said, "should understand that under no circumstances will the world allow it to obtain a nuclear capability."

Mohamad ElBaradei, director of the International Atomic Energy Agency, told Al Arabiya television that he would quit his job in the event of a military strike on Iran.

"It would turn the region into a fireball," he said in an interview broadcast Friday, according to Reuters.

Israeli officials have expressed fear to the Bush administration that a new administration would take months, if not years, to decide on its approach to Iran. The consensus in the United States and Europe is that Iran is still at least two years away from a nuclear weapon. Israeli officials say they believe the threshold is closer to a year.

An Israeli military strike on Iran would almost certainly require American help. For one thing, Pentagon officials say, it would take hundreds of sorties to take out a big swath of Iranian air defense. For another, the United States controls much of the airspace around Iran. Beyond that, Iran would hold the United States accountable for an Israeli strike, and could retaliate against American troops in Iraq.

In Moscow on Friday, Foreign Minister Sergey V. Lavrov urged dialogue rather than confrontation with Iran and said that the United States and Israel had not offered any proof that Iran was pursuing a nuclear weapons program. "So far we have not seen any," Mr. Lavrov said, according to Interfax news agency.

A trip to Tehran last weekend by European diplomats with a new package of incentives was largely for Iranian public consumption, and to appease Russia and China by appearing to be still trying to woo Iran, European and American diplomats said.

But European diplomats have been loath to acknowledge publicly that diplomacy on Iran's nuclear development is in a holding pattern for the next eight months because they fear that Iran will only use that time to make progress on its nuclear program, which Iran says is for peaceful purposes.

"One should not talk about keeping the status quo because that would be dangerous," one European diplomat said, speaking on condition of anonymity under diplomatic rules. "We can't say the clock has stopped and we will begin work again after Jan. 1; that is not a good recipe for success."

Administration efforts to convey a sense of urgency about stopping Iran's nuclear program were dealt a blow late last year with the release of a National Intelligence Estimate reporting that Iran had stopped work on a nuclear weapons program in 2003. In recent months, Bush administration officials have tried to walk back from that report, repeating often that Iran's nuclear program remains a threat.

Many foreign policy experts are now looking to the next administration for a possible new approach to the standoff with Iran. "The Europeans all understand that the carrots-and-sticks approach is not working, and the entire Iran diplomatic policy has to be rethought," said Vali R. Nasr, an Iran expert at Tufts University. Until a new administration takes over, he said, "we're stuck in a process where the ball is kicked to the bureaucrats."