WASHINGTON (AP) - The United States and Israel said Tuesday the rest of the world isn't doing enough to stop Iran from getting the bomb and accused Iran of continuing a covert drive for nuclear weapons, although U.S. intelligence has said Tehran quit its active warhead program years ago.

Secretary of State Condoleezza Rice and Israel's embattled leader, Prime Minister Ehud Olmert, both used speeches to a pro-Israel lobbying group to complain that European and other nations are undermining the hard line against Iran's nuclear program by pursuing business relationships with Tehran.

``Our partners in Europe and beyond need to exploit Iran's vulnerabilities more vigorously and impose greater costs on the regime - economically, financially, politically and diplomatically,'' Rice said.

Olmert went further, saying in prepared remarks to the American Israel Public Affairs Committee that other countries should penalize Iran by barring business travelers, blocking financial transactions and imposing sanctions on Iran's import of refined gasoline and on countries that perform that task for oil-rich but facilities-poor Iran.

``Each and every country must understand that the long-term cost of a nuclear Iran greatly outweighs the short-term benefits of doing business with Iran,'' Olmert said.

Neither Olmert nor Rice mentioned Olmert's legal and political woes. A corruption investigation threatens to bring down Olmert's government and perhaps with it U.S. hopes for a framework Mideast peace deal this year.

Rice said the Mideast peace effort begun by President Bush must carry over to his successor, a note of caution amid the dire political crisis in Israel. Rice said there is still a chance to frame a deal between Israel and the Palestinians this year, although she said the goal is admittedly ambitious.

``The goal itself, though, will endure beyond the current U.S. leadership,'' Rice said. ``I believe that the administration's approach to this problem will and must endure.''

On Iran, Rice appeared emboldened by a recent skeptical report from the U.N. nuclear watchdog. A U.N. report Monday suggested that Tehran was stonewalling investigators and possibly withholding information crucial to the U.N. nuclear monitor's probe of allegations it did nuclear arms research.

The U.N. Security Council has passed three rounds of mild sanctions aimed at getting Iran to give up the most troublesome aspects of its nuclear program. The United States and some others also have separate sanctions that go further. The United States has almost no dealings with Iran and has little direct economic leverage there.

Rice indirectly criticized Democratic presidential candidate Barack Obama for his willingness to talk to Iran, the rising Mideast power that Israeli leaders consider their greatest enemy. Iran's hardline president regularly says Israel must be wiped off the map. On Tuesday he told a European audience that Israel is ``doomed to go.''

Rice scoffed at Iran's claim that its nuclear program is intended only to produce electricity. Why then would Iran keep inspectors away from some sites, reject a generous offer of civilian nuclear help from Russia or maintain part of its program under military control, Rice asked.

``Well, ladies and gentlemen, it's just hard to imagine that there are innocent answers to these questions.''

Later, she directly accused Iran of pursuing weapons on the sly. She said there is no point in engaging the regime until it changes its behavior.

``We would be willing to meet with them, but not while they continue to inch closer to a nuclear weapon under the cover of talk,'' Rice said.

The Bush administration long claimed Iran was hiding a bomb program, a view shared by Israel and presumably the rationale for any military attack either country might launch against Iran.

Rice's words were striking because U.S. officials have backed off pointed accusations since the publication in December of a declassified intelligence report that concluded Iran once had an active warhead program but had shelved it in 2003.

The report said U.S. analysts could not say whether Iran still held weapons ambitions, and said the program might be restarted without U.S. knowledge.

Obama and Democratic rival Hillary Rodham Clinton are to address the AIPAC convention on Wednesday, and presumed Republican nominee John McCain spoke Monday. McCain had a get-tough message on Iran, while Obama is expected to tell the group that he would talk to Iranian leaders without preconditions set by the Bush administration.

The ``furious debate'' about how to confront the Iranian threat ``should not be about whether we talk to Iran,'' Rice said. ``Diplomacy is not a synonym for talking,'' but must be combined with pressure tactics.

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Associated Press writer Matti Friedman contributed to this report.

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